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Key thing to highlight is that you tested on Win10 ARM. I believe folks here are trying to get things running with a Win11 ARM image.
I've tried this - while I no longer get the error when connecting an Xbox controller via USB, the input is still not recognized in the VM
I also have the same issue. I can get my xbox one controller paired and connected but the input is not recognized in Win11. Input gets recognized...
same issue for me too - wonder if it's an issue with the build ..