When you select Envelope as the Modulation source, Modulation (as shown in the Modulation Meter) is controlled by the audio signal and the Envelope Detector section controls.
When the Side-Chain Input selector (the key icon) is enabled, the audio for the Envelope Detector is taken from the side-chain input rather than the current track. Select the Side-Chain Input using the Pro Tools key icon at the top of the plug-in window.
The Threshold slider sets the amplitude level required for the Envelope Detector. The LFO Envelope Detector light blinks brighter when audio is detected above the threshold.