I finally figured out what has been causing me severe mouse look lag issues in #VRChat desktop mode over time for the last year or so.
Turns out #DisplayFusion which I'm using to adjust my desktop wallpaper causes the lag over time, potentially because it also has window management features such as adding extra buttons to the window title bar.
It could also be related to #EasyAntiCheat or #Avast hooking into DisplayFusion to do their thing and potentially causing memory leaks.
Anyways, exiting DisplayFusion fixed my lag issues.
I would never have suspected that it was my wallpaper changer, especially since I'm not using any of it's other features.