Support
Something stuck. We can unstick it.
Write with the macOS version, Apple Silicon or not, and whether the overlay appears when you hold the shortcut.
The usual two permissions
System Settings → Privacy & Security → Microphone, and Accessibility. Without Accessibility, VV can hear you and still cannot paste.
If a second copy of VV is running, the first instance wins. Quit from the menu bar, then open the one you meant.