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It should pop up and if you decline it, you'll see the access denied error message.
Just to make it short, did you try to reinstall Soundpad? It's probably the fastest way to get the permissions restored.
EDIT: I figured it out! I had to make sure that the playback device was my sound card. While the Blue Yeti is the only selected device without having any other devices enabled in the sound settings in Windows. Now with Hotkeys, it is working perfect. Also make sure the hotkey switches between: default and microphone.