Yeah you almost certainly hit the nail in the head there, using just keyboard + mouse it doesn't cause this issue. It might be steam's controller configuration not playing along with the game since I can still control some things on the mouse while in the game (like moving the cursor on the analog stick).
>steam's controller configuration
Steam overlay (or whatever Steam thingy you have going on) is probably the root cause your issue, however, I've gotten feedback from some players that do fine if not better with it on. It mostly depends on your driver setup. I recommend launching the .exe on it's own using your graphics processor if possible. Generally, the game should recognize any hardware that can use an XInput interface. Thanks for playing!