Hi,
it seems to be the minimal deadlock: the app itself works, pressing around the screen works (the physical phone screen gets updated), but the emulated WP is not. It seems to be a drawing issue - dragging the app outside of (computer) screen results in a black stripe where it went out of screen.
Reproducing: pressing backspace (WP UI button) either repeatedly or for a longer moment without keyup. This is not guaranteed to cause the issue immediately, but after a moment it does. Apparently pressing the spacebar (on the PC) fixes the issue, until triggered again with WP UI backspace button.
Cheers,
Peter