It appears that the lr-fba core (v0.2.97.39 build e2a7b83) for RetroPie does not accept digital direction inputs. Previous builds worked without issues and so does current fba2012 (but of course with 2012’s major slowdowns).
It’s definitely a bug and it only applies to games that use analogue inputs (wheels or joysticks), while I clearly remember using the fba core last year without such problems.
Also the windows version of the core seems to be OK so it’s only evident in RetroPie (or maybe all linux cores?)
Using alternatively MAME cores is no solution. Only MAME 2003 (0.78) works without massive slowdowns and the compatibility is terrible.
I also posted on RetroPie forums and was advised to inform you here.