It is specific to VR. Non-VR inputs work fine.
I looked through the enhanced input code and saw that it was correctly updating the bindings according to priority. The old VR binding is no longer present in the array of mappings (EnhancedActionMappings in UEnhancedPlayerInput). Yet the old input action still fires.
When I switched both the old and the new physical input for this action to non-vr controls, like a key, it worked immediately.
Epic, plz fix!