Did you take a look at https://retropie.org.uk/docs/Keyboard-Controllers/#configuration-example-ipac ? It's a page specifically dedicated to keyboard controllers.

Pi Model or other hardware: (3b)
Power Supply used: (The Recommended One)
RetroPie Version Used (retropie-4.4-rpi2_rpi3)
Built From: (The Original Image)
USB Devices connected: Keyboard Only
Controller used: IPAC 2 Controller In Keyboard Mode
Error messages received: N/A
Emulator: (Not Working In Any)

The joypads folder is empty, I`m not using a controller I am using a keyboard and an IPAC 2 controller in keyboard mode. IPAC is running latest firmware.

I have not intentionally disabled the menu toggle, I have accessed RetroArch and changed the Enable Hotkey and that seems to work, I have also specified the Menu Toggle which I`m assuming is to launch RetroArch from within the game?

@horric29 Your email is not working and you have subscribed to a category, meaning I am getting a lot of returned emails. Please check/fix your email or I will be forced to remove/disable your account. Thanks.