If you run xeyes and the eyes follow your cursor when it's above the application you want to test, it's running under xwayland. If they don't follow your cursor, the application is running under native Wayland.
Welp, looks like it is running native wayland yet the cursors are blurry. The only time I have ever experienced that is when an app is running under xwayland.
It definitely isn't on my system, and I did not touch the configs at all; are you sure about that?