I would recommend to switch to "Gamepad with Mouse Trackpad". Note that doing so will cause the game to sometimes show keyboard button prompts (stop using trackpad and do anything else with a controller to learn what is the relevant controller button), as well as cause "Brush styles" menu to behave oddly as it has a different layout depending on whether keyboard or a controller is being used (use right stick instead when setting new brushes instead to avoid it constantly shifting between keyboard and controller layout).

Despite those issues (which I would argue are pretty minor), being able to use trackpad instead of a stick for controlling what is essentially a mouse cursor makes the game feel much better I would argue. Right stick doesn't have precision of a touchpad.

Additionally, the touch screen works well if you want to use it, albeit I think on a device as large as Steam Deck, trackpads are a better choice.

Note that it's not possible to use touch screen or trackpads when playing co-op - mixing mouse and controller is not possible in co-op.