Hi, Rich. No luck with that, either.
I did some more experiments and think that xfe is innocent here. I found one application (geany) that I launch from xfe that works well--geany is somehow able to inform xfe (or fluxbox or Xorg--I'm not sure which) that its startup is complete, triggering cursor change from busy (watch icon) to normal (left_ptr icon). On the other hand, all the other applications that I launch from xfe (e.g., mupdf, mpv, feh) don't seem to inform anyone when they are finished launching, which causes the busy (watch icon) cursor to linger in the xfe window.
I tried creating .desktop files for the problem applications and adding the StartupNotify=false key/value pair, but it doesn't make any difference. I'm running out of ideas.