The trouble is that frontline (the mame driver) doesn't allow for mouse control of 'l' 'r' buttons to work. Instead it's closer to the original that it's two joysticks... and a fire button.
Yes, it is hard to make a frontline controller from 12-way rotator or a mouse.
But Mame causes no problems if he "gets his hands on one (original)" or "(made) one with a channel changer,4 leaf switches and a microswitch button for firing". (quotes from his post)
With either of those, in the ctrlr ini file, set the P1_JOYSTICKRIGHT_
direction, and P1_JOYSTICKLEFT_
direction inputs, with the JoystickRight as the movement stick, and the JoystickLeft as the 8-way rotator, either the original or his handmade one as he described.
The only problem, IMO, is that his controller would be useful for only frontline.