I appear to be seeing a similar issue with Proton and OpenXR, a driver crash where the mouse cursor disappears and the game becomes unresponsive; although I’m using Proton outside Steam but using their OpenXR DLL.
I also strongly suspect a driver bug. Do you also see VK_ERROR_DEVICE_LOST or Xid errors?
Is there anything relevant logged when using PROTON_LOG=1 in launch parameters?
If I can’t get any traction on this issue I’ll be switching to AMD hardware.