Only the inbuilt Microphones didn't work for me anymore.
I TEMP fixed mine by reverting the Kernel version until a permanent fix is found.
I will hide the details due to the valid concerns posted by @Harvey below.

sudo clr-boot-manager list-kernels
This returned the following two Kernels with the latest default kernel marked with an asterisk *
*com.solus-project.current.6.9.12-297
com.solus-project.current.6.9.10-295

To change to the previous kernel I used the below cmd.
sudo clr-boot-manager set-kernel com.solus-project.current.6.9.10-295
Now reboot and you should be back on the previous Kernel to check.
sudo clr-boot-manager list-kernels
com.solus-project.current.6.9.12-297
*com.solus-project.current.6.9.10-295

To revert
sudo clr-boot-manager set-kernel com.solus-project.current.6.9.12-297

WARNING:PLEASE USE YOUR OWN RETURNED KERNEL VERSIONS.

The above workaround is not recommended. The old kernel if it exists is there as a safety option for recovery purposes only. This old kernel will get cleared out periodically and using it could expose you to security issues and other headaches.

For example if you have an nvidia video card using the proprietary driver switching to an older kernel boot option instead of doing a rollback for the updates will break video output since the driver is built against the kernel.

So it would be better to switch to the linux-lts kernel (6.6.43 at the time of writing) as a more concrete workaround. Nvidia users on the proprietary driver will need to install the appropriate driver for that kernel (It will not have -current in its name). i.e if you are using nvidia-glx-driver-current you need nvidia-glx-driver to work with the linux-lts kernel.

After that is setup you can reboot and spam the space bar to get a boot menu to appear where you will be able to select the -lts kernel. You can make that the new default kernel to boot once logged in by running sudo clr-boot-manager update

    Harvey I am using linux-lts and the issue is happening there too.

      I just have a problem with the audio of a video file not working with VLC only, but it must be a coincidence, it's the first time VLC won't read something to me.

      main playlist: playlist is empty
uint DBusMenuExporterDBus::GetLayout(int, int, const QStringList&, DBusMenuLayoutItem&): Condition failed: menu
libva info: VA-API version 1.22.0
libva error: vaGetDriverNames() failed with unknown libva error
[00007fccb40015a0] glconv_vaapi_x11 gl error: vaInitialize: unknown libva error
libva info: VA-API version 1.22.0
libva info: Trying to open /usr/lib64/dri/nvidia_drv_video.so
libva info: va_openDriver() returns -1
[00007fccb40015a0] glconv_vaapi_drm gl error: vaInitialize: unknown libva error
libva info: VA-API version 1.22.0
libva info: Trying to open /usr/lib64/dri/nvidia_drv_video.so
libva info: va_openDriver() returns -1
[00007fccb40015a0] glconv_vaapi_drm gl error: vaInitialize: unknown libva error
libva info: VA-API version 1.22.0
libva info: Trying to open /usr/lib64/dri/iHD_drv_video.so
libva info: Found init function __vaDriverInit_1_22
libva info: va_openDriver() returns 0
[00007fccc0c0f580] main video output error: video output creation failed
[00007fccc0c06100] main decoder error: failed to create video output
[ass] libass API version: 0x1702000
[ass] libass source: tarball: 0.17.2
[ass] Shaper: FriBidi 1.0.12 (SIMPLE) HarfBuzz-ng 9.0.0 (COMPLEX)
[ass] Using font provider fontconfig
[00007fccc0c69c50] opus decoder error: cannot read Opus header
[00007fccc0c69c50] opus decoder error: initial Opus header is corrupted
[00007fccc0c69c50] opus decoder error: cannot read Opus header
[00007fccc0c69c50] opus decoder error: initial Opus header is cor

        FAb7D

        Audio problems with VLC (and not the whole system) is a separate issue. Please look to see if there's an issue on the tracker. If not, please create a new one so we can look into it. Thanks.

            I got my sound device working again by rolling back to update 17
            lspci | grep -i audio
            0000:00:1f.3 Multimedia audio controller: Intel Corporation Alder Lake PCH-P High Definition Audio Controller (rev 01)

            sudo eopkg history -t 17
            This has fixed it for me (Vivobook 14 from 2022)
            Aug. 17th edit:
            I tried the update again and this time - no issues. Sound is fine. Not sure what has changed or if something just went wrong tha last time. I hope it stays that way.

            The latest update fixed it momentarily until I rebooted. Then back to dummy output.

            Hi,
            Is there any progress with this issue?
            Is there anything we can help with?

              bigrammy It is annoying, but I trust the team to figure out what is happening. This is a big regression on audio.

                A few errors in dmesg.

                rammy@bigrammy ~ $ dmesg | grep sof
[    0.058044] software IO TLB: area num 4.
[    0.404119] PCI-DMA: Using software bounce buffering for IO (SWIOTLB)
[    0.404120] software IO TLB: mapped [mem 0x00000000668b8000-0x000000006a8b8000] (64MB)
[    4.722066] sof-audio-pci-intel-icl 0000:00:1f.3: DSP detected with PCI class/subclass/prog-if info 0x040100
[    4.722151] sof-audio-pci-intel-icl 0000:00:1f.3: Digital mics found on Skylake+ platform, using SOF driver
[    4.722162] sof-audio-pci-intel-icl 0000:00:1f.3: enabling device (0000 -> 0002)
[    4.722267] sof-audio-pci-intel-icl 0000:00:1f.3: DSP detected with PCI class/subclass/prog-if 0x040100
[    4.722311] sof-audio-pci-intel-icl 0000:00:1f.3: bound 0000:00:02.0 (ops i915_fence_ops [i915])
[    4.729366] sof-audio-pci-intel-icl 0000:00:1f.3: use msi interrupt mode
[    4.745508] sof-audio-pci-intel-icl 0000:00:1f.3: hda codecs found, mask 4
[    4.745514] sof-audio-pci-intel-icl 0000:00:1f.3: using HDA machine driver skl_hda_dsp_generic now
[    4.745518] sof-audio-pci-intel-icl 0000:00:1f.3: DMICs detected in NHLT tables: 2
[    4.748841] sof-audio-pci-intel-icl 0000:00:1f.3: Firmware paths/files for ipc type 0:
[    4.748845] sof-audio-pci-intel-icl 0000:00:1f.3:  Firmware file:     intel/sof/sof-icl.ri
[    4.748846] sof-audio-pci-intel-icl 0000:00:1f.3:  Topology file:     intel/sof-tplg/sof-hda-generic-idisp-2ch.tplg
[    4.749371] sof-audio-pci-intel-icl 0000:00:1f.3: Firmware info: version 2:2:0-57864
[    4.749373] sof-audio-pci-intel-icl 0000:00:1f.3: Firmware: ABI 3:22:1 Kernel ABI 3:23:0
[    4.749376] sof-audio-pci-intel-icl 0000:00:1f.3: unknown sof_ext_man header type 3 size 0x30
[    4.850225] sof-audio-pci-intel-icl 0000:00:1f.3: Firmware info: version 2:2:0-57864
[    4.850235] sof-audio-pci-intel-icl 0000:00:1f.3: Firmware: ABI 3:22:1 Kernel ABI 3:23:0
[    4.861732] sof-audio-pci-intel-icl 0000:00:1f.3: Topology: ABI 3:22:1 Kernel ABI 3:23:0
[    4.861939] sof-audio-pci-intel-icl 0000:00:1f.3: error: sink BUF2.0\x98 not found
[    4.862029] sof-audio-pci-intel-icl 0000:00:1f.3: error: tplg component load failed -22
[    4.862036] sof-audio-pci-intel-icl 0000:00:1f.3: error: failed to load DSP topology -22
[    4.862039] sof-audio-pci-intel-icl 0000:00:1f.3: ASoC: error at snd_soc_component_probe on 0000:00:1f.3: -22
rammy@bigrammy ~ $
                4 days later

                Seems like sound is working again after last update and rebooting on my laptop! \o/ I hope it'll last. I hope it wasn't too hard to solve the issue.

                Just to confirm it's working again on Budgie with kernel version com.solus-project.current.6.10.6-300

                Thanks.

                Weirdly, I can no longer boot into the current kernel, something related to the snaps mounts (I have some snap packages installed). I guess I will have to wait until LTS gets the correction.

                  AlphaElwedritsch Thank you. I found the issue, lack of space for the kernel boot files. Fixed it and now I can report that latest current fixes the issue. I wanted to be on lts though, will check again in the future.