The loudness detector is designed to alert users when their microphone is muted during video calls using the Vonage Video API. The code creates an AudioContext on the publisher's audio device and uses a MediaTrack to get the user's microphone input. An Analyser is then created to process the audio stream, allowing for the detection of loudness levels. When the threshold is reached, the detector turns on a mute indicator and temporarily disables itself to avoid false positives. The application can react to this event in various ways, such as showing a message or playing an alert.