Do you have a gamepad plugged in?
I used to make the mistake of disabling keyboard controls when a gamepad is connected to avoid hijacking the opponent's controls in Versus, but looking back it seems to cause more issues than it solved them.
As of now, you can
A. Unplug any gamepad already plugged in
Or
B. Use the gamepad (Stick controls + A + B)
(Repost due to technical issues in my end, apologies)