Is there way to achieve a better experience with the Bluetooth driver or an alternative driver?
You can see what I did, updated the firmware. Mouse works fine in Windows still. Now in Ubuntu, I forget the mouse, re-pair, it shows both paired and connected, and registers no clicks nor movement.
It's not like Logitech MX Anywhere 2 mouse pairs but doesn't do anything because it shows Type = Mouse.
01/29/17 The plot thickens: I got a brand new USB mouse. One of the buttons controls volume, so I know it's connected and somewhat working. However, it doesn't click nor point. In xsetpointer -l | grep Pointer, it has XExtensionPointer next to it, and it's showing up in the list of devices. Maybe this helps diagnose the problem?
In a terminal, run
sudo hcidumpand see if moving the mouse produces output (even if the cursor does not move). If it does, add yourself to the bug #1098959 (question "does this affect me?" in upper left corner).Try the suggested solutions, reboot with Bluetooth off, kill the powerd process, start Bluetooth, run without a battery in laptop to suppress the title bar battery notification (may be some power options to set too).
And finally if all else fails, just change your mouse. Only some mice have this problem. My generic BT mouse had the problem, but a Microsoft Sculpt Comfort does not (and it does not display any mouse battery in the indicator either).