I had the same problem, though when I flicked between the two tabs in control panel where you see the response to each joystick movement, it seems to free it up (difficult to describe better as in Afghanistan right now so not near my computer). However I noticed in the War Thunder control menu where you assign axes (rather than single movements) to axis movements of joysticks/virtual joysticks, it only recognised the axis movement and so disregarded this pov hat issue. Not sure what computer trickery is involved in this, however.
AFGHANISTAN!!!