fwiw, I cannot reproduce this here with a virtual device so there's something weird about that specific device somehow. Please also attach an evemu-record of both event nodes for the USB keyboard for an interaction, just in case it decides to send absolute events or something too.
Are you saying that you have an extra mouse and touching that one makes the cursor jump? That's very strange. Can you file a bug for this please and attach the libinput debug-events --verbose output for that sequence. I'd really like to fix that upstream before 1.11 ships.