Internal audio option only exists with Android 4.4+ rooted and Android 5.0+rooted system, it means that if you use Android 6.0+ or Android 7.0+, no matter you root the device or not, the internal option will not appear.
When you choose this option to record, you won’t hear any sound, your voices can’t be recorded either. When you play the recording, you can hear inner-sounds only.
P.S. Not every device could use this feature, otherwise they will receive a “No connection” or “No storage” notification. In this situation, please choose Mute or Mic to record.