Able to reproduce the issue on Windows 10 and Mac 10.12.4 using chrome reported version #58.0.3029.81 and latest canary #60.0.3078.0.
Issue is not reproducible on OS-Linux.

Bisect Information:
=====================
Good build: 58.0.2994.0   Revision(446546)
Bad Build : 58.0.2995.0   Revision(446864)

Change Log URL: 
https://chromium.googlesource.com/chromium/src/+log/c4ac85eec321202ca4ecd56f0364dd49d9fb8236..a05a1702da44842fed11d76a18a1452c06421473

From the above change log suspecting below change
Review url: https://codereview.chromium.org/2637403012

dtapuska@ - Could you please check whether this is caused with respect to your change, if not please help us in assigning it to the right owner.

Adding label ReleaseBlock-Stable as it seems to be recent regression.

Thanks...!!

This happens on Linux as well.

The cause is that we only send a mouse move event to the render if the mouse actually physically moved so that when the render tries to update the cursor under the mouse position it can't because it doesn't know the location.

Will this be fixed eventually? I know it has not worked on Linux and Chrome OS for a long time, but it used to work on Windows for sure, and I think Mac before this recent change. Is it possible to make it work on all platforms or at least revert it so it works where it used to?

I tried for a long time to find a work around for Linux and Chrome OS, but could never figure out a solution.

This has been fixed as of Version 60.0.3112.xx on Windows and Chrome OS

Are you sure? I'm not sure we did anything to fix this.

Yes. I checked it on both platforms. Both the original version I attached to the first email and the latest version of the extension, which can be found here: 

https://chrome.google.com/webstore/detail/photo-screen-saver/kohpcmlfdjfdggcjmjhhbcbankgmppgc

If someone could check it out on Mac and Linux if they are at that Chrome version as well, I would appreciate it.

I don't know anything about the Chrome code, but looking through the version 60 log, maybe it's a side effect of this bug fix? It mentions that it was previously covered up by another bug that was fixed - maybe what broke this as well.

https://chromium.googlesource.com/chromium/src/+/3c2c1396f190aa4187e465eec839d74a5303bc96

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/e3b81fc1af0fa1e82e773307dd61e0d2c04996bf

commit e3b81fc1af0fa1e82e773307dd61e0d2c04996bf
Author: Dave Tapuska <dtapuska@chromium.org>
Date: Wed Aug 30 21:46:53 2017

First mouse move sent from aura seemed to always be zeroed out.

When a surface isn't produced the transformed co-ordinates end up
getting not copied and then would end up as being zero.

BUG=714378

Change-Id: I5d3251ec074089e664189e8d54468f498ef9b451
Reviewed-on: https://chromium-review.googlesource.com/643626
Reviewed-by: Ken Buchanan <kenrb@chromium.org>
Reviewed-by: Sadrul Chowdhury <sadrul@chromium.org>
Commit-Queue: Dave Tapuska <dtapuska@chromium.org>
Cr-Commit-Position: refs/heads/master@{#498625}
[modify] https://crrev.com/e3b81fc1af0fa1e82e773307dd61e0d2c04996bf/content/browser/renderer_host/delegated_frame_host.cc
[modify] https://crrev.com/e3b81fc1af0fa1e82e773307dd61e0d2c04996bf/content/browser/renderer_host/render_widget_host_view_aura.cc

Tested on latest Canary #62.0.3202.0 on Windows 10, Mac 10.12.6 and Ubuntu 14.04 and able to reproduce the issue on Mac.

Steps Followed:
1. Unpacked the attached extension in original comment.
2. Loaded the extension.
3. Clicked on the “Preview” button provided in the extension.

Mouse pointer is still observed in the Preview screen of Mac.

In Windows and Linux, mouse pointer is not seen and screensaver preview exits upon moving the mouse.

@dtapuska -- Please find the attached screenshot and confirm the fix.

Thanks!

Deleted: 714378.mov 9.3 MB

714378.mov 9.3 MB Download