8 years and 5 months later… SOLVED!!!
I thank the Lord Jesus Christ for helping me find the console variable that fixes this problem, even in UE4!
For UE4 OR UE5 (Tested in Unreal 4.27.2, 5.3.2, 5.5.4):
Enter this console command in the Editor:
Slate.RequireFocusForGamepadInput 1
Or add the following entry to your project’s DefaultEngine.ini file to make it the default:
[ConsoleVariables] Slate.RequireFocusForGamepadInput=True
This will prevent your gamepad from controlling anything in the Editor when another window has focus (ie. you are running a PIE or Play in Standalone Game session).
For UE5 ONLY (tested in 5.3.2 and 5.5.4):
Enter this console command in the Editor:
Slate.EnableGamepadEditorNavigation 0
Or add the following entry to your project’s DefaultEngine.ini file to make it the default:
[ConsoleVariables] Slate.EnableGamepadEditorNavigation=False
This will prevent your gamepad from controlling anything in the Editor at ALL times.
NOTE: this console command only works with UE5, for UE4 you will need to use the other command.Credit to @syuusyuu1 for the UE5 console command.