That mode is the only reliable way to use at this moment with VCV.
The issue with VCV from a point of view is something with the framework used for VCV rack (https://www.glfw.org/) interact deeply with mouse events at kernel level, so basically only recognize in correct way mouse events coming from the mouse driver (mouse events comming at kernel level). Elephant send mouse messages at API level and then troubles start.
There is nothing wrong with VCV, is just how the Framework over where is developed VCV works.
Is easy to test this, with the method of click your mouse and then turn the dial, as you can see always work if you press down the real mouse first and always first.
Solution 1: Write a virtual HID mouse driver work with Elephant.
The down side of this can be maintain the driver and ensure work ok with future upgrades of the OS, sign the driver with Microsoft, is mandatory driver be signed etc.
Not impossible but is the more complex solution.
Solution 2: Use and Arduino board, around 15U$, to make the Arduino act as a real HID mouse, then Elephant interact in invisible way the arduino.
Downside of this way:
Arduino cost 15U$ what I no think is a problem but users have to spend that money.
The Arduino board use always a USB port.
If you use this outside of studio you always have to carry the board and also for sure buy some of available cases for the Arduino board.
The positive side of this solution is no coded driver in the middle, and work exactly like real mouse no matter what happen with OS future updates.
Program the Arduino board wont be a problem duet can provide a simple software for program the Arduino with just few clicks, user just have to do simple task to prepare the Arduino.
Also when Arduino cost 15U$ and use always one USB port is the most reliable solution I tested at this moment.