Does your touch daemon/addon really run while Kodi is running?
In my case touch addon starts before Kodi. This way it gets exclusive access to input. Didn't know for LIBINPUT_IGNORE_DEVICE at that time.
Few years back I helped one guy who used 40" TV with touchscreen in a museum. He made custom fullscreen skin with only few buttons which represents which video to play. Something similar what you are doing ![]()