I have a Fedora 25 Virtualbox VM with two displays running on a Windows 7 host that I upgraded from F24. Whenever I start a Wayland session, the mouse pointer on the screen does not reflect the actual place in the display. It's as if the two displays are averaged together and that's where the pointer thinks it should be. When the pointer is in the right display is completely ignored and in the left display the mouse pointer displayed on the screen is actually 2X to the right of it when clicked. For example, if I want to log out of the session, I put the mouse pointer in the middle part of the top and then the menu on the top right lights up and I can click it. If I put the pointer on the top right menu, it doesn't light up and clicking it is actually clicking on the second display on the right. The same can be said in the vertical space but the difference between the displayed and actual mouse pointer is very small. This doesn't happen when the displays are mirrored, only when they are in a primary/secondary configuration. The resolutions or the displays (as detected by Linux) are 1920x976 for the primary and 1920x1016 for the secondary. They are full screen windows and those are the maximum resolutions I can get.
That's the default behaviour in the server (fwiw, libinput doesn't decide where the pointer is, that's the job of the upper levels). If you need to map to a monitor, you'll need to set the coordinate transformation matrix, e.g. https://wiki.archlinux.org/index.php/Calibrating_Touchscreen or use the xinput map-to-output option. Ideally this should be done by the desktop environment but clearly this doesn't seem to work in your case (indicates a mutter/gnome-settings-daemon bug)
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