http://cgit.freedesktop.org/xorg/xserver/commit/?id=56c90e29f04727c903bd0f084d23bf44eb1a0a11 Appears to be the culprit.
When using xrandr --scale, the mouse becomes constrained to a box with the original screen dimensions. This is very problematic for those of us who need to use the command to make netbooks' screens more manageable.
perhaps Dup of Bug 39949 RandR panning doesn't work
I suspect same kind of cause, perhaps you nailed it to the applied code patch. I saw
Mouse shouldn't move into area outside the monitors
somehow seems like a possible cause of this.
*** This bug has been marked as a duplicate of bug 39949 ***
I can confirm that reverting the patch fixes the mouse confinement.
on Mar 24, 2017 at 04:18:07.
(provided by the Example extension).