Cannot exit fullscreen and cannot interact with fullscreen applications
Troubleshooting is a process of elimination and often requires patience.

The first thing I would do is to test whether this behaviour is replicated in Safe Mode.

Boot into Safe Mode

Follow these steps to boot your Mac into Safe Mode:


Fully shut down your Mac
Restart your Mac
Immediately press the Shift key and keep it down 
Let go of the Shift key when you see the login window (NOTE: If you have FileVault enabled you may need to log in twice).
Take a note of what happens (i.e. is the issue still present, etc)
Now exit Safe Mode by restarting your Mac as normal
Once logged in again, test to see whether the behaviour continues


When you're finished let me know how you went and we'll go from there.



If you find that you don't have the problem in Safe Mode, but still do after logging in normally again, then it's time to investigate login items, fonts, and kernel extensions

Investigating login items, fonts, and kernel extensions

Let's start with Login Items:


Startup normally
Go to System Preferences > Users &amp; Groups
Select the Login Items tab
Take a note of your Login Items 
Now remove all of them by highlighting them and clicking on the - button below
Restart your computer


Now your Mac will boot up without those login items loading. Test this and see if the problem persists: 


If the problem goes away you know one (or more) of the Login items were causing the problem. You can then add them back in one by one until you've identified the culprit. Problem solved.
If the problem does persist, it's either a problem with fonts you've installed yourself or with a 3rd party kernel extension. A little more info below:


Fonts:- You can remove any of the fonts you've installed yourself to see if this makes a difference.

Kernel Extensions:- You can open Terminal (found within your Utilites folder) and enter the following command:

kextstat | grep -v com.apple

The above command will list 3rd party kernel extensions (you may need to stretch the Terminal window so it's easier to read). Look for anything you don't remember installing, or something that belongs to software you've removed, or just anything that looks out of place. Remember though, this is a list of 3rd party kernel extensions and therefore any of them could be causing the problem.