That "Compatibility Mode" alleviates the issue proves that this is not a fault with Windows, rather that Starmade (or one of it's libraries) is telling Windows that it understands and will handle DPI itself, and then failing to handle it correctly.

4K (3820x2180) works correctly, although the UI is unusably small.

In T1994#78762, @lancake wrote:

I assume the native resolution your laptop is set to is 1920 x 1080 and not 1280 x 720?

That stopped it from briefly displaying the StarMade window at 1280x720 on boot, but it did not fix the mouse issue.

v0.19584 has the same behaviour in fullscreen mode, even though the game starts windowed.