Headset not recognized,permanent mute issue.

Hello. Thank you for posting on the xbox forums. I would first try checking for updates for your controller with the headset plugged in. Follow the link below for the steps. Keep your headset plugged in until its done updating. Let me know if this helps.

Update your Xbox One Controller

Hi James1608,

a very good reason that it may have issues is that the headset is not muted by checking the mute button on the headset controls. Increase the audio by going to Settings>Device & Accessories
and select your controller to adjust audio settings. Use a different controller or headset to check for any malfunction on the hardware be recognized might have to do with the actual headset.

You can't with the Stereo Headset Adapter since the chat settings are on the adapter instead of the Xbox. Is the mute icon permanently lit up or are you seeing a mute icon on the Xbox?

No it's not the issue.. Even if my nat was strict if i push the mute on my mic i should see the orange light right? It just seems that the controller/xbox do not recognize the headset

This issue has happened to me before as well. It seems like the controller does not recognize that the headset/mic is plugged in. I have resolved this issue by unplugging the headset from the controller, and plugging it back in and pushing the mute/unmute
button. That has always resolved my issue and the mic begins working again.