I stumbled on something. I noticed Printer marked Connected and Connect at power on. I don't remember what these were set to before, but I don't have a local printer, so I turned them off. To my surprise the keyboard started behaving better, but not fully fixed.
Then I turned the printer back on (Connected/Connect at power on), and the key delay didn't get worse. Great.
Next I turned off USB Controller Share Bluetooth devices with the virtual machine. Ah! the keyboard works properly.
Then I turned USB Controller Share Bluetooth back on, and keyboard is still OK.
Weird stuff.
It makes me wonder if it would have been fixed by toggling any arbitrary setting in Hardware.
