I am having the same problem getting this to work in RetroPie 4.1 with two players. It works fine with one player.
I installed driver v0.1.4. manually back in RetroPie 3.8 and got it to work with two players no problem. But now for some reason I can't seem to get it to work with two players.

I installed this driver automatically from RetroPie Setup drivers install. So it was not a manual install this time around.

I then ran sudo nano /etc/modules to verify that mk_arcade_joystick_rpi was added. It was.

Then I ran sudo nano /etc/modprobe.d/mk_arcade_joystick.conf and added the line options mk_arcade_joystick_rpi map=1,2 Making it the only line in the file. Saved the file and exited.

Performed a reboot and BAM! Joystick 0 is detected and works, but Joystick 1 is not.

Is there some other thing I need to do to make this work? Thanks in advance.

EDIT: I reposted to a new thread since this one is marked as solved, but does not solve my problem.