We discussed this on IRC but I'll add it here for completeness.
Previously the state was reset every frame because
probably didn't bother putting the right calls at the various places in the code so it was handled in one place which set the mouse to be hidden when we are currently in the game play state. The approach of this script worked because the mouse was always drawn at the end of the frame so it didn't matter that the state switched from shown to hidden and back. Now that the OS is drawing the cursor (at least in antipodes) this leads to some complications because the point at which the cursor is drawn isn't determined by FSO anymore.
The solution for this particular problem is to just add a io.setCursorHidden(true)
call when the PromptBox is closed. That will still be compatible with current builds and will also work with future antipodes builds.