In prior version... I always ended up just having to click upon the "Record what you hear" icon. I experienced similar problems in that version as well.
This machine is just using whatever onboard sound the MoBo has on it. Off the top of my head.. RealTek?
So far I can only find Options>Preferences>Audio>Record tab. But there seems to be nothing in there that deals with or allows manipulation of sampling rate, etc? And picking from among all the choices in the device: dropdown had no effect on the error message.
I'm a Dev, so you can likely just give me very high-level terse direct answers here of things to check on.

Including a screenshot of the Preferences dialog, as I believe that'd be most helpful here.
Thx
-G.