Taking a stab at this (haven’t used any combined Traktor setups in ages), but I think you need to understand a few things here.
1) The S8 is a stand-alone controller, if you hook up line signal (or even phono) to decks c and d on the controller, it will let you mix that in with whatever is coming out of your Traktor through decks a and b. It will only play the actual music, WITHOUT going through Traktor (for decks c and d). So you will hear what you’d expect to hear on the master output and be able to play like that.
2) Traktor can only record whatever goes through their software. Under 1) the sound goes straight from the inputs to the mix bus and then the master out, never being routed to the software. And the latter is what you need to setup correctly in order to include those extra channels into your recording.
As I said, I am a bit rusty, so other users might have to help you with the specifics, but in Traktor under settings, there is an audio setup tab, where you can set phono/line input channel(s) and you have to set something under the input routing tab as well.
When all that is setup correctly, when you play a tune on deck c or d and you click on the letter C or D in your Traktor software decks, you get the option to pick Track Deck, Remix Deck and Live Input. Select that last one and you will play the external inputs through your c/d decks and those sounds will now be included in your recording as well.
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