I'm running the latest patch of BG3 on a PC (Via GOG) with 2 xbox controllers.
Start the game, with one controller connected, and start a new game.
Get to the character creation screen everything is working great, I then connect the second controller, and get the option to add a new player.
I now have split screen character creation.

Problem is controller 1 is controlling the first character (left side of split screen)
Controller 2 is controlling both sides of the split screen!
So If I select down on controller 2 d-pad or left stick it will move both characters down (if different sections or screens of each character is selected doesn't matter, a down input on controller 2 will move down on both sides of the split screen UI)

This duplicated input only happens on the d-pad and left stick. Right stick and RB / LB work as you would expect.

FIX FOUND
While typing this I found the cause and fix so will leave this here incase anyone else runs into this problem.
Something in Steam is causing the issue. I haven't found what yet but shutting down Steam instantly resolves it (launch Steam and the issue comes back).