Found an issue with source code. Pull request are pending.
https://github.com/libretro/libretro-atari800/pull/38

@cyperghost Keyboard is now fixed official. You can set hotkey to {SELECT|B|Y|DISABLED} now

https://github.com/libretro/libretro-cap32/issues/61

Button Shortcuts for keycompo

{ RETRO_DEVICE_ID_JOYPAD_B, // if you change this position, update JOY_EVENT_ID_B { EVENT_WRITE, "CAT\n", NULL } }, { RETRO_DEVICE_ID_JOYPAD_Y, // if you change this position, update JOY_EVENT_ID_Y { EVENT_WRITE, "|CPM\n", NULL } }, { RETRO_DEVICE_ID_JOYPAD_A, { EVENT_WRITE, "RUN\"DISK\nRUN\"DISC\n", NULL } }, { RETRO_DEVICE_ID_JOYPAD_X, { EVENT_WRITE, "|TAPE\nRUN\"\n^" } }, { RETRO_DEVICE_ID_JOYPAD_START, { EVENT_VKEYB, "VKEYB\n", NULL } }, { RETRO_DEVICE_ID_JOYPAD_UP, { EVENT_WRITE, "1\nY\n", "PRESSED => 1/Y" } }, { RETRO_DEVICE_ID_JOYPAD_DOWN, { EVENT_WRITE, "2\nN\n", "PRESSED => 2/N" } }, { RETRO_DEVICE_ID_JOYPAD_LEFT, { EVENT_WRITE, "4\nS\n", "PRESSED => 4/S" } }, { RETRO_DEVICE_ID_JOYPAD_RIGHT, { EVENT_WRITE, "3\nJ\n", "PRESSED => 3/J" } },

@crumbs Please don't bump old topics - open a new topic and ask your question. If you wish, reference the old topic for additional info.

Yeah, lr-vice virtual keyboard is flawed, it seems an hit or miss, game sensitive. On older version there was no way to activate cursor, so better than nothing.
It is better to use usb keyboard for sure.

I know more than 2 years passed, but I wanted my phone to config retropie without using a Keyboard and tested your app. From your code on Github there are 2 problems in the main .py file.
1 - You're importing 2 times subprocess, which is redundant, no big problem whatsoever here
2- There's a Syntax error on line 114 that prevented the service to start on my PI3. There aren't () both at start and end from the print command.
So I changed it, copied the file to /usr/bin/ and it worked like a charm.

to answer my own post, the dev of libretro-cap32 answered me on github. It's a simple matter of switching the virtual keyboard to gamepad emulation by using the SELECT key. Then you can use the virtual keyboard with the mouse. YEAH !