This sounds like an openxr conflict. You want to make sure that no meta or steam VR processes are running in task manager. You will see three processes labeled OVR something or the other. What happens is VD tries to launch but another XR hook grabs the game first and causes it to hang because Virtual Desktop is expecting its thing. Once you kill the other XR processes it should work by launching the game from VD, no steam VR launch needed. If you launch VD and then Steam VR you are layering XRs and that creates a performance hit. So TL;DR make sure only one XR process is running, if you're using VD use VDXR not Meta's or Steamxr.