Ok, so got the problem solved. It was suggested that I use a sound mix and modify EQ settings to create muffled audio.
So I tried it out and it worked.
What I did was create a sound mix, and set the gains to something really low, I made some other tweaks, but that was the main change made to give the desired effect.
Then I just set a key to Push the sound mix, and voila, deafness.
Just FYI for those reading this in future, make sure that the sound classes you want the effect to apply to have “apply effects” set to true.