The Application Audio Capture source has had problems for a long time, and still does. Most complaints are about it picking up the correct app, but crackling, but there are other failure modes as well, including yours.
If you want something that is guaranteed to work, you'll need to use a different method.
The most reliable is the old one of capturing *all* of what a specified device does - speakers, headphones, dummy plug, etc. - and then controlling by other means what goes to that device. You can do that with a physical cheap USB sound card that doesn't wire to anything, or with a virtual device:
VB-Audio Virtual Cable and App's
vb-audio.com
A close second is VoiceMeeter:
VoiceMeeter Banana, the Advanced Virtual Audio Mixer by V.Burel
vb-audio.com
VoiceMeeter Potato, the Ultimate Virtual Audio Mixer for Windows
vb-audio.com
Two different sizes of the same thing. When you install it, you get a virtual audio mixer, like a small physical console, and some virtual devices that connect to some of its inputs and outputs in addition to its physical connections. Send an app to one of those virtual speakers, and it appears in the corresponding input to VM. Send something to a virtual output from VM, and it appears in the corresponding virtual mic for OBS or any other app to pick up.
