What you did wrong was assume that MK8 supports headsets. It doesn't. Your voice was picked up by the gamepad mic, not your headset. It's weird. Great game, though.Yay!
I played for a little bit last night with some CAGs.
Tried out my headset for a little bit too, people could hear me, but I could only hear people through the tv and not the headphones. Not sure what I did wrong :/