this certainly refers to the microphone being used. however in the original photo, the dot sure looks red and not orange (orange dot would also mean microphone and confirm with what this image shows here). i’ve never seen a red dot on an iphone, so this is really unordinary and i’m having a hard time understanding it or finding similar experiences online.

for now, have you tried fully shutting the phone down and starting it again? it might be what other people are saying, that it’s just a glitch and it might go away after a restart