I just got my PS4 controller paired with my lakka pc and the D-pad doesn’t work correctly. I can go side to side in the XMB just fine, but pressing UP or DOWN takes me to the end of the menu with no way to stop at any choices in between.
I had this issue too, check to make sure you don’t for some reason have the ps4 controller mapped to more than one input. (Player 1/player 2)
related to that, you can make sure “all users control the menu” option is disabled in settings > input