Is there some combination of settings that will allow both the remote and host cursors to function at the same time?
Is the remote cursor blocked when the local cursor is being moved? They should move and work both. In fact, both users - local and remote - compete for the same cursor.
Seeing both cursors on the local (admin) side is a different thing though. By default only the local cursor is rendered, but you can see both cursors. In order to do that, go to Connection Properties -> Cursor -> Rendering of Host's cursor - > "Always".
Please, note that moving the local cursor will move the remote cursor, but not the other way around.
Let me know if I understood you properly, or if you meant a different thing.