This is an incredibly frustrating issue. I do a lot of screen capture recordings and I can't have my mouse arrow popping up a blue circle every 4 to 5 seconds. I'm not sure exactly when this started for me, but now that I'm ready to do some more recording I'm noticing it constantly.
Here's a solution I've found to at least stop the blue circle:
- Start with the Microsoft suggestion of going to the mouse properties.
- Click on the "Pointers" tab.
- Select the "Working In Background" pointer and click on "Browse"
- Select the first mouse arrow option (the one that looks like a normal mouse arrow)
This doesn't get rid of whatever is causing the system to have to keep working in the background, but it will at least make the blue circle stop popping up.