Having the option to make the mic icon appear when you are unmuted would be a big and easy QoL improvement for many users compared to the current options.

It would eliminate anxiety about whether your mic is live while also increasing immersion when it's most needed, most of the time.

Showing the mic when it is muted is odd for most users as that's when you're most likely to be watching something, listening to someone, dancing, playing, etc. which is precisely when you don't want extra immersion-breaking screen clutter.

Showing on activity leads to anxiety because you often can't see what state you're in, and it pops up all the time on every tiny little noise which is very distracting.

A "you're live" indicator is standard practice, but it's the one option that is missing here.