There are several reasons why you might not be picking up desktop sound.
One, you could have it muted unintentionally.
Two, you could have the wrong device selected in audio settings for your desktop audio.
Third, you could have the encoding set to MP3, which isn't compatible with MP4 out of many decoders (use AAC instead).
Otherwise, would have to see a log file to check to make sure the app is running okay, and see what you're capturing (you should generally always post this regardless):
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