Hearing a child crying doesn't just make me aware that someone is distracted, it also distracts me and makes it much harder to communicate. I would much rather have one person on the call be distracted while on mute than have the entire call be distracted. Also depending on what video conferencing software you use, background noise like crying continually interrupts the speaker and makes it really hard to hear.
Nothing annoys me more than people having background noise and not muting themselves, no one should be pushing crying babies and barking dogs to my headphones without a reason it completely ruins the call for me. If I really need to know if they are distracted, I can just look at their video.
I think a big difference is the assumption of the kind of meeting you are in; for most of the business meetings I consider valuable, if there is someone distracted by a transient issue the meeting should stop and wait, and if it doesn't they are just going to have to stop everything themselves to request things be repeated for them. If you are in a meeting and it doesn't matter if you are distracted you aren't really participating, are you? ;P So like, definitely mute the call as you are just an observer.
Nothing annoys me more than people having background noise and not muting themselves, no one should be pushing crying babies and barking dogs to my headphones without a reason it completely ruins the call for me. If I really need to know if they are distracted, I can just look at their video.