Really as simple as the title says. When using a gamepad, you can’t focus on any button in a custom UI, and therefore it is unusable, making games unplayable without using the default Pop-Up dialogue device.
This occurs with any type of custom UI and on all gamepads I could test (xbox, PS, switch)
Below is an example of a UI that cannot be interacted with due to this bug
Edit: note that this is a grid UI and it is set up correctly.