UnInstall Bluetooth drivers and re-install Bluetooth drivers meant for Windows 7 or Windows 8.0 in "Windows 7 Compatibility Mode".
I had tried all suggestions and troubleshooting steps including disabling power saving options, doing a factory reset and clean install of Windows 8.0 / 8.1 but I continued to have problems with Microsoft Bluetooth mice (w/o USB dongles) randomly disconnecting. The ONLY solution that worked for me was un-installing existing Bluetooth drivers from Control Panel as well as Device Manager and re-installing Bluetooth drivers meant for Windows 7 or Windows 8.0 in "Windows 7 Compatibility Mode". The key here is installing Bluetooth drivers in "Windows 7 Compatibility Mode" by right-clicking the Bluetooth EXE file > Properties & selecting "Windows 7 Compatibility Mode". Avoid Bluetooth drivers meant for Windows 8.1. Luckily, my touchscreen laptop manufacturer (Acer) had both Windows 7 & Window 8.0 Atheros Bluetooth drivers for my model on their support website. Additional side-benefits I noticed after doing this:
- All three models of built-in Bluetooth Microsoft mice (Microsoft Scuplt Touch, Sculpt Comfort & Bluetooth Notebook Mouse 5000) started working perfectly without any sudden disconnects or freezing;
- The overall mouse operations also became lot smoother and predictable;
- Windows Power Management started working perfectly with the laptop going into sleep / standby nicely and waking up instantly without any lockups or WiFi issues
- CPU / Fan noise is much quieter-- it seems the Bluetooth drivers installed as I suggest are more "in harmony" with the rest of the system.
- Everything including the Bluetooth mouse is working great for almost a week since I made these changes. I promptly updated my complete system image backup with the new setup.