Hi,
The function of the mute 'touch button' on the capacitive strip is provided by the audio driver, but first try a Hard Reset as follows
Shut down the notebook, unplug the AC Adapter and then remove the battery. Hold down the Power button for 30 seconds. Re-insert the battery, plug in the AC Adapter and start the notebook.
If that fails to correct the problem, try reinstalling the audio driver ( probably IDT, but may be Realtek or Conexant depending on your exact Model ). Restart the notebook after reinstalling the audio driver.
Regards,
DP-K