Microphone indicator was introduced to report applications using a microphone.
That wasn't a bad idea, but due to a lack in qt libraries, we can't discern microphone input devices from pulseaudio monitor sinks. The latter are used by applications such as PulseEffects. They record the stream from a source (i.e. the audio from Firefox playing a YouTube video, in order to add some effects). Since they record something, they act like a microphone, even if they are not and do not use a microphone.
I filed this bug report months ago, but nothing was resolved after months.
An initial workaround was this revision, that simply did nothing since PulseEffects keeps showing and the tooltip reports it's using a microphone when that's not true.
So a solution to this issue is renaming the tooltip reporting Monitor audio, informing the user that something is monitoring an audio stream. That includes both cases, applications that are really using a microphone and applications like PulseEffects that are using an audio stream to record it and redirect the stream inside its input pipeline to apply some changes.
If you will accept the revision, I will also help to translate it in my language.