I've updated the plugin. I don't know if the update will fix your issue, but try it out and see what happens.
If it doesn't, then there might be a plugin compatibility issue (which I can't really fix, unless I have access to your project).
Viewing post in Custom Controls (RMMZ Plugin) comments
It's working!
Steam seems to be related. I tested the new version with a deployed project (Steam closed) and the overriding works perfectly. Also with the new version, in playtesting mode now the gamepad behaves just as if the puglin were disabled for me (No longer the advance dialogue button changes from A to Start)
Thanks reflector88!