Segmenting the words is an important and otherwise painstaking task in this process. The LSM provides a good, automatic, first-pass segmentation, and takes much of the tedium out of this process. The LSM first takes the text transcription and determines a pronunciation for each word. If it doesn't know the pronunciation, the LSM will ask you for it. Then it uses Sprex' proprietary, special-purpose, statistical signal processing technology to identify and locate the words and their component sounds with the audio file.
Phonemes are simply the sounds that make up words.
Other sounds, which aren't part of words, are not phonemes, whether human-produced, like burps, or environmental, like kitchen clatter. Since the LSM works at the level of phonemes rather than words, it only knows how to find phonemes in the waveform. For example, the way it finds the end of a word, is just by finding the end of the last phoneme in the word - it's just a phoneme analysis. Analyzing phonemes means that the LSM does not recognize inbreaths, outbreaths, laughter, burps, grunts, bangs, pops, musical notes, kitchen clatter, or other non-linguistic sounds. No, so LSM won't recognize it.