Right-click on the game in library -> Properties



Controller -> Override for Baldur's Gate -> Disable Steam Input



When using your gamepad natively, Steam tries to handle it in similar fashion like a Steam controller, emulating functions to access Big Picture mode easily.

Unfortunately, that disables the game's own controller support.

One of the differences are, when using the left control stick:

when Steam Input is enabled
the left control stick behaves like a mouse pointer, which can be useful especially in games which are designed specifically for mouse and keyboard

when Steam Input is disabled
the left control stick allows you to control your character directly, like in a third person game

I recommend the game's native controller support and therefore to disable Steam Input.