After updating to the new version of Minecraft for xbox as stated here, the game's cursor started to have a jittered movement. This is because the cursor seems to move based on the pixels around the screen now, rather than the based movement by hand. This also triggers input delay for several users, and makes PVP or just the general experience very annoying in several ways.
Reproduction example
While in a container/inventory or start screen, try to move your mouse and notice how the cursor in-game moves. It indeed seems to move based on the pixels around the screen, rather than realism.
The cursor of the game also changed from the one used in Xbox in general, to a pixelated one from the Minecraft itself MCPE-163504. Could this be the reason this issue happens?
It looks like the new GDK version of the game forces you to play with the pixelated cursor from minecraft, rather than the one used from Xbox.
Note that {}this only started to happen after the new performance update. This also affects the preview version of the game, possibly since its initial release.
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The ticket has been updated, as requested. 🙂

https://www.youtube.com/watch?v=5kBDjuaOoII&t=17s
Clip showcasing the problem.

I got this problem too. Haven't played Minecraft since cause Bedrock on Console is my only option. Will the old xbox mouse that is also used in Edge on Console be brought back to the Xbox version of Minecraft with the next major update?

Just tried out 1.20.20.20 and the mouse cursor still only moves based on the pixels in the game

Preview 1.20.20.20 and the curso indeed still moves based on the pixel of the screen.

In 1.20.30Â the fix also didn't worked. Kinda sad

the cursor has crazy accel if you get the default cursor to show up by pressing the win key you can see it

Footage of the bug in action
[media]

Affects 1.21.50
We're splitting this issue out to distinguish between mouse and controller movement issues, as they will require separate fixes. Please continue to update this issue for the Mouse issue, and see MCPE-162847 for the Controller issue.