Having the same issue with pcsx2 and xemu. Steam's virtual controller won't work in the flatpak versions for me but will with the appimage binaries.
Having same issue when running RetroArch as non-steam game (since the Steam version is limited). Will always ignore controller layout I set and use the desktop configuration. Also to note, a lot of controller inputs will still interact with Steam behind RetroArch, causing even more chaos, like if I press X, it will open the on screen keyboard behind RetroArch and cause it to disconnect from RetroArch.
Tested this with Dusk (Twilight Princess PC port) and same exact issues occur
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I am trying to use Steam to run 3 Emulators DuckStation, PCSX2, and Retroarch from my Steam Link. All 3 emulators are installed via Flatpak from Flathub, however I have also tested the deb version of Retroarch as well as adding Non-Steam games installed with Lutris running under wine-ge.
My Steam Link (which is on the latest update on the stable channel), has both an Xbox One Controller, and a Dual Shock 4 controller paired with it on Bluetooth. I've also tested it by connecting the controller to the host PC via USB.
When I launch any non-steam game emulator installed from my Steam Link, the input "Steam Virtual Input" is detected, but no button or joystick movement is registered. When attempting to rebind the keys in PCSX2 or DuckStation nothing is detected. The only time this isn't the case, is when I connect my Xbox controller to my PC via a cable.
However when I enable "Steam Input" or the Xbox Controller is connected to the Steam Link, no button or joystick movement is registered.
This is True for both Emulators installed via Flatpak, or natively, as I tested with Retroarch installed via my package manager (with assets). To best see this use a PlayStation controller as it uses steam inputs by default.
With that said, Steam still detects the controller, since when I hit the guide button, and press the d-pad I can hear the Steam GUI in behind the emulator.
Steps for reproducing this issue:
The Expected Result is Retroarch will showing 2 messages starting Steam Virtual Input is being used as Controller 1, but no button input will be registered.
Workarounds:
Disabling or using a Controller without Steam Input will allow these emulators to work. Bluetooth may work, but is untested. This work around does not work with a Steam Link.
Install the steam version of Retroarch and point the directories at the Flathub version. Still is limited since DuckStation nor PCSX2 has a up to date release on Retroarch.