With Windows 10 version 1803, Microsoft changed the behavior of microphone app access setting so that it affects desktop applications as well.
To fix this do the following:
1. Go to Windows settings and select Privacy
2. Select Microphone and switch on the “Allow apps to access your microphone” toggle.
3. Restart those applications where you’ve wanted to use the microphone.
4. (Optional) To block apps access to microphone you will have to toggle microphone off for each app. You will have to do this after each new app you install.
Useful for Skype, TeamSpeak, WhatsApp, Steam Voice chat, Twitch, Adobe Audition, Audacity etc
Thanks to Shane for the tip.