For those of you who are using, or wanting to use, only P360s in your panel, this can be done. At least in older versions of Mame (in this case .104) selecting the desired direction, the pressing twice in each undesired direction, will result in UP NOT LEFT NOT RIGHT. This appears to only be compatible with non-micro-switch/round restrictor sticks, as with standard, 8-way restrictor sticks, one will get stuck in the diagonals during game play.
However, for diagonal movement, all that's needed is to select the diagonals, which do work with optical, etc, and normal sticks and are surprisingly accurate and responsive.