Controller talk:Steam Controller
Changing desktop configuration (configuration that is used if there's no game running trough steam) to "controller" preset which essentially makes the controller act like 360 controller for the game, makes controller do absolutely nothing anywhere. It seems like only keyboard and mouse buttons work if controller is used outside of steam and that's what controller installs itself as. At that point it's basically best to keep default bindings if game uses mouse needing launchers or crashes with dialogue requiring confirmation.
Only way to make the controller picked up by game as a full controller is to launch the game trough steam, either steam game or game added as non-steam game.
And there are other confirmations that the non-xinput api blocking has indeed taken out: https://steamcommunity.com/app/301970/discussions/0/412447331645908446/