MiSTerAddons recently released a firmware update for MiSTercade V1.X which resolves this issue.
Basically, there was a recent update to Jotegos framework which conflicts with the twin stick mappings found on V1 MiSTercades. V2 MiSTercades are not impacted, nor are non-Jotego based cores.
See his blog post for more information, which includes the new firmware/upgrade instructions:
https://misteraddons.com/blogs/news...ware-update-and-pre-configured-input-mappings

