Hardware mouse doesn't work when scaling mode "unspecified" or "stretched" is enabled, which according to your post means it can work if I understand it correctly.
it effects the vanilla game, windower, and ashita -- there is a workaround now for ashita. See http://ashita.atom0s.com/forums/viewtopic.php?f=20&t=188 for some information, it may help you. I do not know if this function/fix is out of the scope of dgVoodoo. You can probably PM atom0s on his forum to get any info from him if you want to implement a similar workaround or identify the issue.
"Full screen" or "Windowed" scaling doesn't seem to effect the tests.
OS: Win 10, GPU : R9 390
borderless fullscreen with windower : Hardware mouse doesn't work
borderless fullscreen without windower : Hardware mouse doesn't work
borderless window with windower : Hardware mouse doesn't work
(borderless window without windower doesn't exist, it just scales up to look like borderless fullscreen)
windowed mode without windower : Hardware mouse doesn't work
windowed mode with windower : Hardware mouse doesn't work
Tests are considered passing when the solid colored yellow mouse is always rendered when hardware mouse is enabled. you don't have to get in game, only the login menus such as the character select once d3d intializes to verify it works. Software mouse is transparent and dim by comparison, as well as non-fluid movement.
That said, software mouse on windower as mentioned before isn't a big deal. Sure it's harder to see and the game tends to move the cursor around unexpectedly compared to hardware mouse but it's still usable. I'd consider this a low priority issue since everything else works flawlessly.
I'd like to also thank you for doing a great job in getting this working, the performance gains are incredible, as well as the extra level of detail that was apparently missing this whole time and I never knew.