Thanks for the video!
Since I don't know what settings you've got set or what's in your profile, I'm going to shoot from the hip here -
You'll want to try creating an empty profile with one command to see if you've got something else interfering with your hotkey - that is, there may be a command in your profile set to the same key that's doing stuff. Been known to happen.
Pressing the push to listen doesn't affect the microphone at all. That is, it does not mute the microphone (or stop the speech engine from handling events), but rather just sets a flag so that anything that the speech engine picks up gets ignored or processed. So, effectively, just pressing that hotkey just sets a value (and maybe play a sound if that's on) and that's it - it's extremely lightweight and about as basic as you can get, so, I'm kind of at a loss as to what could be hanging things up unless your speech engine has become borked. If it's your speech engine, you'll want to take a look at this thread, as it may correct your problem (ignore the title):
https://forum.voiceattack.com/smf/index.php?topic=64.0 If you've got a lot of line noise, it could be a contributing factor in hanging up your speech engine.
Something else to know is when you press to listen/not listen, VA will take things you are saying into consideration prior to you enabling listening. That is, if you are saying, 'Fire Weapons' and you are holding down, 'not listen', if you suddenly turn on listening within the speech engine's recognition event process, 'Fire Weapons' will get executed - this is by design as it allows a little more fluid interaction (a little more human and less robotic). If you don't want it to behave that way, and would prefer that anything being spoken while not listening is enabled, there is a setting in options, on the Recognition tab called, 'Reject pending speech'. Just enable that option.
Also, axon, this is not the only weird stuff going on with your setup. I hate to be the one to mention this, but have you considered trying VoiceAttack on a different machine? It seems like you keep running up against issues that nobody else seems to be experiencing (especially when you consider all the issues as a group).