UPDATE: I'm on Plasma desktop, and removed a long-used widget "Compact Media Player" in favor of the bundled Media Player widget. And suddenly all media key interaction works. System audio mute, previous, play/pause, next, etc. Keep this in mind if you're here looking for answers.
I'm using KDE (and Firefox, not Chrome if this matters) and found another problem why it was not working: the media player Clementine overwrote the global shortcuts to control the current media player.
Go to Settings > Global shortcuts > Media controls and reassign the keys. Works for me again.