M1 Mac Mini won't allow play sound when using USB mic? How to fix?

Instead of the 3.5mm jack on the M1, I use a DAC USB adapter by Creative Labs - Soundblaster (Play3!).

It connects to your USB port and digitally separates the microphone and headset which I need for my VOIP phone line headset.

The sound output is much better than the analog 3.5mm output!

I have a USB mic built in to my Logitech webcam. It works fine when the audio input is set to the Webcam. Maybe there's something about your particular mic that doesn't work with the mini? Perhaps you can try some other mic to see.

Go to System Preferences > Sound > Output.

Select Mac mini Speakers (or your headphones/speakers)

Hope this helps :D