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Well, now the controller works, but the Steam overlay does not. Changing the executable from the launcher (online.exe) to the game (psobb.exe) didn't fix matters. I'll have to mess with this some more the next time I am playing from my PC.

I've been having the same issue, but for me it only cropped up recently. When I was playing about two weeks ago, I wasn't having any trouble using Steam input to configure my controller. It's also not a problem for me on Steam Deck, only desktop (I'm using Fedora Plasma). Thanks, I'll try...