Here's how you capture a live stream. There are two main parts.
This is the easy part. Make sure iShowU is setup to record your microphone.
The Other Side
To record the other participants of the call / livestream, enable "Record application audio". You must make sure that whatever app is being used outputs its audio to SWB Audio Capture.
Some apps don't see the default output of the mac change (which happens when you enable 'Record Application Audio'). So when in call, make sure whatever app you use is outputting it's audio to SWB Audio Capture.
Note: if the app is not outputting it's audio to SWB Audio Capture then you'll record your voice, but everyone else will be silent.
Here's an exampe using Zoom.us:
You must have iShowU running, and app-audio enabled in order to hear what people on the call are saying.
Don't mess with Sys Prefs | Sound | Output
When using "Record application audio", iShowU will manage the default output device. Don't change it manually. If you do, the end outcome is ... undefined. You'll probably not hear other people on the call.