Two issues I'm having:

1) Analog diagonal is too sensitive in menus. Even the slightest off centre movement has the cursor jumping to the left or right selections. Not sure if this is the controller or the game. This wouldn't be an issue since I would usually use the D-pad in menus but...

2) D-pad is completely broken. Pressing right acts as if the button is being tapped repeatedly, pressing left the cursor moves right and left, pressing down or up and the cursor alternates between that direction and right (as if both inputs are being tapped 10-20 times per second)

Edit again: Tested on old Logitech F510, zero issues with D-pad and analog diagonals didn't feel quite as sensitive in shop menu. Game crashed after disconnecting both controllers
Edit again again: D-pad issue is not present in both Phantom Brave PC and Disgaea PC, only Disgaea 2 PC
Final edit I hope: Fixed the D-pad issue by going into advanced controller settings for the game in big picture mode and setting it to "radial mode without overlap" but this completely disables diagonal movement for characters