It’s the middle on the X axis but mid-top on the Y axis
Whenever I stop moving my mouse the icon appears at that position. When I’m moving my mouse it moves the way it normally would and the icon is in the correct position, and when I start moving it after the icon snaps back it snaps to where it’s supposed to be.
This happens when the mouse is locked in place from holding the right mouse button, it does not happen in first person.
This appears to have started happening in the most recent update.
EDIT: Thanks to 1/2 TheGamer101 we know that this only happens when you have a gamepad plugged in.