https://imgur.com/a/jNpvW (video of the bug)
Internal microphone works only when Siri is activated.
I started noticing this after installing Boom 2 (I think), which I've uninstalled now and the problem still persists. I've tried restarting, creating a new user, resetting PRAM, and resetting SMC.
I've also tried messing around with the Audio MIDI Setup.
I've noticed something interesting there which might be relevant. I tried muting the microphone and activating Siri, the microphone is automatically unmuted when Siri is activated and re-muted when Siri is deactivated.
Best Answer
I could solve the issue by activating the dictation functionality. You can find it on "System Settings" > "Keyboard".