The ZOTAC handheld looks interesting, and while it’s nice to see decently sized touchpads, they are very low on the device and it seems like that would be uncomfortable to use.
A bunch of back buttons would have mitigated the issue a little, but it seems like there is only two, which is a shame.
It’s a bit of both, along with the Linux AMD drivers being superior in many cases to the Windows drivers.
I’ll add for completeness that vkd3d-proton handles DX12 titles, and of course OGL and Vulkan are supported natively.
For me, it’s not the steam machine itself but the peripherals like the steam controller that would come with it. There still isn’t a proper replacement for the original SC that has: trackpads, gyro, back buttons, and full steam input support.
Everything else is missing trackpads and aimed at emulating a console controller, so you get weird situations where one mode supports gyro because it emulates a switch controller but doesn’t support the back buttons and analog triggers, and another supports the back buttons and analog triggers but not gyro.
Funnily enough, the steam deck itself is the best option as a controller if you want all of these features.
Of course, a new steam machine wouldn’t be required for a new SC to happen, but it makes sense to pair them, as they did originally.
Are you using the handheld/deck image? If so, see if you can replicate the issue in desktop mode as it might be a game mode specific issue. I’d also test a different keyboard and gamepad, if you have easy access to those.