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When Steam detects them and the overlay works properly, it will disable the mouse feature.

To fix this issue, you can add those non-Steam games to your Steam library. Yet, if you launch a game from outside Steam, your controller will still be recognized as a mouse and your controls will not work properly. Thus, the game will treat your controller as a mouse with all its default keybindings. If you launch a game from Steam, the client will disable the gamepad-as-mouse feature automatically while you are in the game.

If you want to use controller as mouse for more than a few random clicks, you may need to enable full controller support on the desktop. If you have an Xbox 1 controller connected, you can press and hold the Xbox button while moving the right stick to move the mouse pointer hold the Xbox button and press the right trigger to click hold the Xbox button and press the left trigger to right-click. Let’s take Xbox One controller for example. Also read: How to Fix Steam Not Detecting Controller? Use Xbox One Controller as Mouse
