@sugarfree it changes line 950 below in runcommand.sh's matchbox parameters.
If it's XINIT-WMC the window opens with a cursor visible. XINIT-WM it hides the cursor
https://github.com/RetroPie/RetroPie-Setup/blob/master/scriptmodules/supplementary/runcommand/runcommand.sh
Totally off topic, I'm debating experimenting and seeing if I can use Labwc as the window manager instead seeing as X11 isn't as efficient and outdated. You can even see it in things like the Ocarina or Majora's Mask PC Ports, using matchbox it's slower in the title menu than if I use a different window manager.
I doubt it'd affect dolphin much as most of the slowdowns it feels are caused by certain effects that the Vulkan or opengl drivers on raspberry pi don't have a handle on