Nope, it still moans about that directory not being there. As a workaround, I've created that folder to be able to test this more thoroughly.
Shoulders now work as shift (and presumably ctrl too, not tested that), but the keyboard shift has been disabled - that's not a problem for me personally though. I couldn't find any way to shift+break (the standard way of booting discs), but thankfully the run game option seems to do that in practice - it inserts a disc into drive 0 then shift+breaks it.
The appearance of the mouse pointer in menus seems somewhat erratic. On first boot it's generally there and lets you select options until you've chosen your first key binding in the configuration screens, then disappears leaving you to use the d-pad to select instead.
But despite those gotchas, it's pretty usable for playing games already, and should be usable for those wanting to play with BBC BASIC on it (provided you bind caps lock to one of the game buttons, I suggest, and maybe * (star) to another). Game specific keypad bindings work too provided you actually read the instructions!
I did notice a graphical gotcha in Dare Devil Denis (the only game I have for test at the moment, as all of my old games are stuck in ADFS format tar files for now, (erk!). Seems that the bottom line of the display on the teletext mode menu in that game is often corrupted - sometimes it repeats press A-F from above, and sometimes it shows the truncated last line of the previous game (which is in a different graphical mode, so shouldn't be possible). Bringing up the virtual keyboard and dismissing it fixes that though, and it shouldn't be game-breaking in most circumstances anyway.