This guide will fix the many issues of this game and try to make it run smoothly and fix mouse lag mainly... Tested on ASUS GL703GS (gtx 1070 8GB + i7-8750h + 144Hz screen with g-sync), Windows 10 20H2.

Recommended settings for this game: full screen, 1920x1080, 60Hz, no v-sync + fixes below...

IMPORTANT:
You must apply ALL fixes numbers below, especially don't skip 2-3.
You have been warned.

Download NVidia Profile Inspector[github.com], load and apply this game profile: https://1drv.ms/u/s!ApMUGr0cuN39gexzfbYjHq6ucWaFBA?e=o21sAi
Namely:
Maximum pre-rendered frames = 1
Prefered refresh rate = Use the 3D application settings
Vertical sync = Fast Sync
Toggle FXAA on or off = On
Threaded optimization = On
0x80857A28 = 0x00000001 (enable Unknown settings button on top)

Highly recommended: forced Anisotropic filter x8 or x16 for improved texture quality details.

Download Microsoft Application Compatibility Toolkit (ACT) from
https://docs.microsoft.com/it-it/windows-hardware/get-started/adk-install

Windows Assessment and Deployment Kit (ADK) for Windows 10 (1903, fine also for 1909, 2004 uses a specific version)

Don't worry: if you select just MS ACT from last page of the installer you will download only ACT (should be less than ~10MB, not the whole ADK of 6.4GB!!)

"Application Compatibility Tools", select this one only

Then run the MS ACT 32bit version and load this cfg for Prototype 2: https://1drv.ms/u/s!ApMUGr0cuN39gexyJXH45_NqcmtRQQ?e=eSG0g2

Save the DB, and with right mouse button Install it (you'll find it under installed programs). You don't need MS ACT anymore after you saved and installed the patch, and can even uninstall the whole app leaving just the fix in your system.

Extract and in case overwrite files in the game directory with those in this archive: https://1drv.ms/u/s!ApMUGr0cuN39gexwF81KgKmEUSQlVg?e=OEDUR6
Will make the game run at 60fps to avoid bugs, fix Steam crash on quit, and fix a few other minor issues...

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Normally you don't need this because 8 core limitation is included in the MS-ACT fix above, but...
You can use "imagecfg.exe -a 0xff prototype2.exe" to persistently patch the game exe and limit it to 8 cores max, to avoid crashes at launch on modern CPUs.
https://robpol86.com/imagecfg.html

I can't reproduce this on my machine ASUS GL703GS (GTX 1070 8GB + i7-8750h + Win10 20H2) but if it's your case, then try to put in Steam properties for this game as launch options:
"resolution=1920x1080@60"
Some users also said their problem was caused by a "bad" USB connected device...

👉🏻 N.B.
Playing with mouse+kbd, the game may still have some very minor cyclical micro-lags that can't be completely fixed. Blame developers.

Enjoy this game, finally!