We finally got this working. Had another coworker on a support call with Mitel and he asked them about this issue. Not sure on the specifics, but he sent me this after getting the recording to work.
Checked device monitors under the Level 2 CTI, not found.
Determined that Mitel Multinode is being used, needs to be Mitel Driver.
Switched L2 services
They sent him a driver and replaced the driver on the server.
@vincewhirlwind Our ACD agents are like that as well. Extension is 374 but agent ID is 5374?
@zulualpha the 69xx series phone do NOT support ACD agent and queues. Our current environment has been using ACD agents and queues for years, but apparently they migrated to hot desking rather the ACD for the 69xx series I believe.