Patch 8 introduced dynamic soundmixing. It seems to do two things : drown out surrounding sounds when a menu is open; cut off sounds from adjacent rooms.
I like the change overall, though I wouldn’t have given it a second thought unless Larian had made a big deal of it during the PfH. Two notes, though.
Firstly, endlessly repeating NPC barks are annoying even if a menu isn’t opened. When trying to focus on the world next to a looping voice-box, dynamic soundmixing will ensure the ten second loop is the only thing you can hear or think about.
Secondly, the game has a strange sense of which room I’m in because it takes the camera’s position into account rather than where I’m looking or where the party is. So the party could have crossed a threshhold, the camera shows the room in front of them, but the soundmixing is only interested in the previous room.