On PC with latest patch, if I press the xbox button to record a clip or take a screenshot, the circular mouse waiting icon appears. If you press the xbox button again to return to game, the mouse waiting icon doesn’t go away and isn’t responsive to mouse movement either. If I move the mouse icon off-screen while in the xbox dashboard, I return to game, the waiting icon will just return to its original position in the middle of the screen.
The only way to remove the icon from the screen, I found, is press xbox button and select goto xbox app, you will go back to desktop with xbox app. When you maximize the game again, the mouse icon will be gone. Press the xbox button again, and the bug starts all over.