The legacy memory cards folder is only used if Mcd001.ps2 and/or Mcd002.ps2 is detected in retroarch/system/pcsx2/memcards/ and the "Memory Card: Slot N" core option is set to "Legacy".
This can be useful if you were using an older version of the core that didn't use the saves folder yet, or if you transferred the memcards folder directly from standalone.
Most of the information you need is here Gamepad - ArchWiki
Depending on what controller you have, maybe this is related [BUG] Cannot bind controller buttons Issue #4414 PCSX2/pcsx2 GitHub