1) Make sure that game recording is turned on using the method above.
2) Launch any game.
3) Press Windows key + G to open the game bar. It may ask you if you want to recognize the current application as a game if it doesn't recognize it.
4) Click on the cog on the far right of the bar to open a settings window.
5) Uncheck 'Open Game bar using (button) on a controller'. Should look like this: http://i.imgur.com/YSOzuou.png
6) Steam is now free to use the button in game. Do a little victory jig.