Trying to unset ID_INPUT and associated tags is 'fun' but it'd be easier to just set a libinput-specific property to ignore it. This also caters for the case where the device remains a input device in general but libinput cannot/should not handle it.
I'm taking the liberty to link https://gist.github.com/fghaas/3406be59095de212182f1803a503a64b for future reference (and for the benefit of other interested parties) here. It seems that at least for this specific input device, the documented/preferred way to disable via libinput doesn't work.
https://lists.freedesktop.org/archives/wayland-devel/2017-August/034779.html
commit 00272cfbb1e34c9179539fb4f874acfa4faf5ad6 Author: Peter Hutterer <peter.hutterer@who-t.net> Date: Thu Aug 17 01:25:24 2017 +0200 Add support for LIBINPUT_IGNORE_DEVICE
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