As a bit of an update - it has been time consuming for a machine I was about to throw in the bin! But I have learned some things. After setting it up with Windows 10 and finding the odd missing driver. The machine has both IMEI and AMT - which is a security hazard. So I installed the two firmware upgrades from 2017 from the HP site, as well as the necessary chipset and card reader drivers. The other two needed were in "optional updates" in Windows update (bluetooth and NFC). Googled a bit more about the AMT risk and it seems the solution is to "unconfigure" it in bios. Which disables it. Which I have done. Downloaded and ran the Intel assessment program for that security risk and it says it has the necessary firmware which has patched it and is unconfigured. So it is safe. Now back to the buggy bios update the caused all the issues. That was also from 2017 and was a critical bios update due to the CVE risk thing relating to AMT. It seems they rushed it out (IMO) regardless of whether it broke hardware! Hence I had found others having similar issues online at that time.
So I ran the whole scenario and Intel output via Chat GPT and it suggested (as I had already decided) that it was safe even without the critical bios update - ie pointless installing it if the machine becomes unusable. And it's already secured via the firmware and unconfiguring.
It is now running nicely on Windows 10 and will keep that as my machine to get the ESU upgrade (I have a particular program I want to keep on it, that won't run on Windows 11 24H2 - not at the moment anyway - maybe that will change).
The touchscreen remains disabled and the mouse pointer behaves 99% of the time, Very occasionally, and randomly, it will shoot over to the right and click on something. But hardly ever now. I also turned off a setting in mouse pointer settings that helped stabilise the mouse pointer. Control panel - mouse - pointer options - and unticked "enhance pointer precision".
And just to rule out some kind of rootkit malware or bios malware making the mouse and screen do things, ran a couple of bootable AV's and MWB rootkit scan. All clean. While nothing can remove bios viruses, one of the ones I ran can detect them and all came back clean.
So to me, it was definitely an extremely buggy bios update, meant for urgent security, regardless of whether it broke hardware! (Which is a kind of security! Just disable the machine itself lol). These machines are ex business machines and the bios update was probably to secure fleets of them. Where they'd just be abandoned if they stopped working. It was probably the same bios update for all three models - G1, G2 and G3 - mine is the G1 - maybe it worked ok on the two later models.
That bios update is still on the HP website and HP support assistant still downloads it for upgrade. It should come with a warning! But it seems the firmware upgrades and disabling AMT in bios are enough. So although resolved, it is annoying as previously it had a very nice, working, touch screen.
Chat GPT analysed it as the bios update making changes to power management which affected the way the touch screen worked - ot something like that.