This problem has been reported upstream as it does not look like and ebuild problem: https://bugs.freedesktop.org/show_bug.cgi?id=8276
s/and/an :)
Thanks for taking the initiative to report upstream! I would recommend unmasking and trying X 7.1. It has an updated version of the mouse driver.
Confirmed that it works perfectly well with version 7.1.
*Sigh* After a reboot, I experience the same problems again... I wonder what's going on.