***SOLUTION***
Very simple fix guys. I was having the same issue as most of you here - Xbox controller connected and recognised but not working.
Follow the below steps;
- Make sure the latest Windows update has installed and isn't pending etc.
- Unpair your Xbox controller from your bluetooth settings
- Plug controller in to PC via USB cable
- Download and launch Xbox Accessories app
- You will see a message on Xbox Accessories saying that an update is required for the controller
- Click the the update required button
- One update is complete re connect your Xbox controller via bluetooth
- Done
Thanks, the whole thing was hiding in pending updates. That I paused a week ago.
Bluetooth adapter was recognizing the controller as the 2006 something-something, and after I updated OS to the 19041.685 build everything was on point.
So, if someone is still struggling with this problem - Make sure, that your OS Build (win+r → winver) is 19041.685 or higher.