I've got the same issue with my Fanatec wheel.
The game was fine on Wednesday 19/10/22, the wheel connected to my profile and I went into My Team and raced with no issues.
Then I open the game with the wheel the next day, Thursday 20/10/22 and it takes about 5mins to load the first screen. It then pauses when I try to sign in with the wheel and when it finally does load, all my inputs are lagging. It finally calms down after a few minutes, so I navigate to My Team and load up my game. It works fine all the way up to the car being on track for the formation lap: then it doesn't register any of my inputs to drive the car, it sits still and revs by itself. I then press the pause menu to try to restart the session to see if that's the issue. However it takes about 2mins to load that and then lags when I try to press the restart race button. I then try to open the Xbox menu to exit the game and that also takes 2mins to load. I finally exit the game and quit it, then try it again and the same issue happens again.
I tried going in with just the controller on and it works and the car drives normally, but as soon as I turn my wheel on the car starts driving on its own and not following any of my inputs. When the wheel is off again and it knows the controller is on, it then works fine again.
I've quit the game and loaded it up again, then uninstalled and reinstalled the game, updated all of the drivers for my Fanatec wheel and pedals and the issue still persists.
I decided to test my Fanatec setup on Assetto Corsa Competizione to test if that had an issue, but that worked fine.
The Xbox also does not record any captures when I try to get a recording of the issue.
This is a very annoying issue which could be an impact of the game going free this weekend or a small patch for something else ruining the game, but whatever it is, it needs to be fixed asap as most people don't want to play the game with a controller and it ruins the experience.
Please fix this soon EA!