Set up 2 new windows 10 laptops ( same issue on a windows 7 desktop )
When these devices are running host, their native mouse movement becomes erratic.
You move the mouse on the host computer and it bounces back to the point it was when connected to it using viewer.
Your settings are correct. This is by program design - when you move your admin mouse pointer the remote mouse pointer also moves, but not vice versa. So inevitably if you once move your remote mouse pointer (by physically moving the mouse) and then the admin moves hers the remote pointer will "jump" to the admin pointer location.