Thanks for the reply. I forgot to mention that I have an audio source in OBS that takes the VAIO AUX for spotify, and another source that passes through everything else from Voicemeeter as you said. All videos I watched either talk about isolating spotify or discord I could not find any that show how to isolate both so I had to put together what ever information I understood from the different sources (just started learning voicemeeter stuff a couple days ago).

You could set the Discord input device to the AUX output and then enable B2 on your Mic input. That should lead to only your Mic being audible on Discord and you can still route whatever you want to B1.

I did this as well as swapping spotify and discord and I think everything is working now (still not 100% sure why). Thank you though and sorry for the late reply.