VoiceAttack's interface never mutes your mic. Push to listen/not listen simply indicates when to ignore a speech event (the speech engine is on all the time). This is so you can have actual voice commands that turn, 'listening' on and also allow for listening overrides.
While the speech engine is always on, it constantly tells VoiceAttack about its state. If the speech engine is not receiving any audio (dead signal) from your system, it tells VoiceAttack. VoiceAttack then shows the red icon. If the audio comes back, the speech engine tells VoiceAttack that there is audio and VoiceAttack turns the red icon off.