Mouse hover doesn't work when Microsoft mouse is connected
I know it's an old thread but since there are no solution mentioned for the Microsoft Sculpt Ergonomic Mouse... I had the same problem and fixed it just now. 

It is a hardware issue where the little button below the Windows blue button gets stuck. I had two of these and the one where it was clickable, it worked fine and the second one had the button stuck and the hover over wasn't working.
I stuck a push pin into it and tried to pry it out through the rubber layer on it and it now works fine.

So it was down to poor quality buttons on this nice mouse.