On a M4 Macbook Air, there was enough lag to make it unusable for me. I hit the shortcut and start speaking but there was always a 1-2sec delay before it would actually start transcribing even if the icon was displayed.
If so, there should be "keep microphone on" or similar setting in the config that may help with this, alternatively, I set my microphone to my MacBook mic so that my headphones aren't involved at all and there is much less latency on activation