My D-Pad Fires A Diagonal When I Only Press One Direction

Nothing is imagining anything, and this is a specific and well understood failure that is almost always repairable.

The D-pad on this controller is one plastic cross sitting on a central pivot post, with four conductive domes underneath it. When you press a direction, the cross is supposed to tilt on that pivot so only one dome is compressed. If the pivot post wears, or the cross sits a fraction too low because debris has packed under it, the cross stops tilting cleanly and starts to depress like a flat plate. The direction you pressed goes down first, and the neighbouring dome follows a moment later. That is your diagonal, and it explains why it happens on some presses and not others: it depends on exactly where on the pad your thumb lands.

The reason your test result is useful is that it rules out the alternative. If the board or the membrane were at fault you would see a dead direction or a direction that does not register, not two registering together. Two at once is a mechanical geometry problem above the membrane, not an electrical one below it.

Start by cleaning under the cross, because packed dust and skin oil are genuinely the most common cause at 18 months, and it costs you nothing. If the diagonals persist after cleaning, look closely at the central pivot post. A worn post is visible once you know to look: the tip is flattened or shiny rather than sharply formed. A new D-pad cross is a very cheap part and swapping it restores the tilt. If the post is on the shell rather than the cross on your revision, a replacement shell half is still inexpensive.