As of 30-Sept the bug is still present; the problem is as described above: dictated text appears in grey. It should turn black, and be incorporated into the active document. If one waits long enough this usually happens. But if one does not wait long enough, which is the the typical workflow, the dictated text disappears and is deleted.
This is new behavior, it began about a week ago.
Microsoft needs to fix this. As is well known, Microsoft is forcing customers to move from perpetually licensed products to subscription software with many cloud based functions. If cloud based functions are allowed to fail arbitrarily due to the unintended introduction of serious bugs, as is the case here, it is a real problem for customers. With perpetually licensed software end-users have some control over updates, features don't disappear in a haphazard way. This is, unfortunately, not the case with subscription software, with background updates and cloud based functionality.
Voice to text is not used by everyone, but it is essential to many, including users with disabilities.