Steam Controller stops working inside games

I have already installed the correct udev rules (the controller works ok with the steam package from the distro (Archlinux))

The controller is detected and works fine in big picture mode

Problem is when I start any game: It is not working at all

**If** I disable steam overlay, then works but It is not detected anymore as a controller (I can still can go through the menus but the game is actually seeing the controller as a keyboard)

The issue names no source files, tests, or entry points. Start by reproducing the controller failure with Steam Overlay enabled and a game, comparing it with the distro Steam package; done means the controller is detected and usable inside games without disabling the overlay.

Written by the indexing model from the issue text.