While I can't recall the last time I used this function, I do recall a WGH traveling train show where MTH had a booth. I recall the MTH rep using the mic to talk to kids walking by the layout. Things like, "hey you kid with the blue hat, come here, I want to talk to you" - plenty of volume in a noisy exhibition hall. Some kids would actually have a conversation with the 1/48 figure in the cab - suspension of disbelief. Great crowd pleaser - grins all around by the adults who "knew better."
I don't know how the mic sound is classified but, in addition to the master volume, perhaps the volume of the mic sound is something that has an individual volume control. I know you can independently set 0-100% the bell volume, horn volume, engine sounds volume, etc. Perhaps whichever volume setting controls the mic volume is not set to 100%. I may be completely off base, but one of the DCS gurus will know if this applies.