How do I fix this issue with my PC and headset/microphone?
Connect headset to another device by Bluetooth. Smartphone, tablet, other PC. Take audio output out of that and put it into line input of the PC that has the Razer surround.
I also tried disabling the hands-free and connecting to headset stereo on the "playback" section and keeping the hands-free on the "recording" section. However, when I join discord, I cannot hear anything.