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In WIndows 10, I only see "Reduce Colour mode" and "Run in 640x480" as greyed out.
I dont see visual themes, so I assume you not on Win10?
But I believe greyed out options is an issue with 64bit applications and afaik SDDE is 64bit only.
Edit: Even without the compatability option, you could disable visual themes in WIndows temporaraly, and test. If it does not solve the cursor problem, then you can look for other solutions.
Did you try to disable the STEAM overlay for the game, as well as any other overlays like Discord etc?
And did you try this:
https://steamcommunity.com/app/307690/discussions/1/619568793933048620/
Besides whats advised there, try setting pointers to "none" also.