I think I found a workaround although I think it should still be considered broken because ultimately the Override X-Box Gamepad set to Off isn’t really set to off. It should use default X-box controls but even after setting to off I had to set other settings to off also.
I did these steps:
1. Performed a full factory reset.
2. Opened Skyrim and made the following changes in the VorpX in-game menu:
Headtracking=disabled
Override X-Box Gamepad=Off
VorpX Gamepad Buttons=Off (Why is this necessary when override gamepad is off?)
Changed FullVR Right Stick Y Sensitivity from 0.3 to 1.0 (Why is this necessary when override gamepad is off?)
Before I did these steps, right stick Y sensitivity made no difference but now it does.
I hope this helps someone. I will report if my workaround has further issues.