Do you have SteamVR installed? Virtual Desktop needs SteamVR to run games. Also, make sure you are running the multi-threaded DCS (from the DCS.exe in the mt-bin folder) as it will be OpenXR by default then. In SteamVR you can check that the OpenXR runtime is SteamVR. You should then be able to do as you have been and get DCS to launch in VR mode.
A friend and I both get these stripes - only on the PG map. We have different machines and VR headsets (he's on Intel CPU, 3090, Varjo Aero, I'm on AMD CPU, 4090, Pico 4).
I have a Pico 4 using Virtual Desktop in godlike mode (4090) and use this F-14 cockpit mod for better readability and performance.
F-14 VR Ultimate Xperience (F14VUX) (digitalcombatsimulator.com)
Winwing have said that they took down the F16 joystick firmware as they are working on an update. No timeframe as yet. Mine has been showing "retrieving" for months and there is no F16 joystick firmware listed on the Winwing download site. I guess we just have to wait another "two weeks" :-).