Game chat doesn't work with friends until

a lobby is found.

http://xboxclips.com/Sly+lnstinct/0c5bd1d1-b394-42fe-b2bb-baf7c8463660

As you can see, the microphone icon doesn’t appear until the lobby is found. Also, it shows the mic symbol even when you don’t have one plugged in. I think that should be changed to reflect who doesn’t have a mic and who is just sitting there listening.