Okay... I had it BACKWARDS.
For *me* tape was not the answer. My extra padding was already making the sensor think I always had my headset on. So every time I started a session I would always see that floating warning and keyboard enter "Win + Y to use the desktop instead..." -- maybe reverting to manual and telling my system that my headset was ALWAYS not on my face. Possibly turning off the sensor entirely -- or at least whenever Squadrons boots, it reads "sensor off" and Squadrons NEVER registers it as on again.. So...
I moved my extra padding up out of the way very slightly (which in the video below you can see also has a white sweat-soaking stick-on on top).
I have sensor SET TO AUTO.
I start WMR and then DO NOTHING with my keyboard. I DO NOT see the floating warning.
Before even starting Steam or Squadrons I can confirm that everything is working properly and automatically with the Thumb Test -- the big bar with "Win + Y to use the desktop..." appears and disappears with the thumb. THIS IS KEY and if it's working you're basically done.
(Also, in this state I can completely turn off WMR and it will automatically turn back on when I put my headset on -- a behavior I never did before.)
Then:
I put my headset on.
Start Steam and Steam VR.
Start and play Squadrons.
I've tested this both through desktop shortcuts and inside VR with controllers.
EA needs to unhook any and all behavior from presence sensors.
-JC
@EA_Tom @SRJay78 @achreios @vaerkay @Tineras