i am also having this issue. i can also not set any controller shortcut to record gameplay. when i am in big picture mode, this error by OP displays, when trying to use steam desktop UI to setup the same controller shortcut, i click the "set controller shortcut" and steam kinda flickers like its opening a window, but nothing actually happens.

*Edit* I know this is for sure tied to the Steam Client Beta because i changed back to stock steam version and can set all controller shortcuts perfectly

yes this is just a steam client beta issue