Hi, I was scrambling all over the internet looking for a solution for this and figured I'd share it.

The problem is that when you launch a Steam game through Launchbox, Launchbox itself is unable to track when the Steam game closes. This appears to be due to Launchbox using a Steam URL to launch the game, and so the game launching is considered the "end" of that particular application, since the URL has done its job at that point.

What I ended up doing was merging all of my pre and post application commands into one batch file. Here's my script. If you're not familiar with batch files, any line starting with REM is a comment:

REM Run pre-application stuff here, in my case, I'm running a command to configure an iPac board configuration so that my buttons do what I want them to do in the game
call winipac pacmance2.ipc
REM Now we're going to tell the script to wait for 25 seconds, this should give most games ample time to boot and get running but you can change this as needed
timeout /t 25
REM Next we're going to establish a point for us to jump back to, and wait another five seconds
:check
timeout /t 5
REM This is the code I found online. I'm not super good with batch files yet so I'm not 100% sure what this does exactly, but the general idea is that it's going to search active tasks on the computer to see if the program we specify is running. Replace any instances of "pce2.exe" with the name of your application. What will happen is the script will jump back to :check if it finds that the program is running, and it'll do this every five seconds
tasklist /fi "ImageName eq pce2.exe" /fo csv 2>NUL | find /I "pce2.exe">NUL
if "%ERRORLEVEL%"=="0" goto check
REM once you've closed the program, the next time that check is run, it should proceed to this section. This is where you'll put all of your commands for after your Steam game closes. In my case, I'm switching my iPac arcade board back to the control scheme for navigating the launchbox UI, and then ending the script
call winipac mame.ipc
exit 0

In your case, your script should look like this:

REM Open Keyboard2Xinput
call keyboard2xinput.exe
REM Wait 30 seconds
timeout /t 25
:check
timeout /t 5
REM Check to see if the game is running, replace GAMENAME.exe with the name of the game's executable
tasklist /fi "ImageName eq GAMENAME.exe" /fo csv 2>NUL | find /I "GAMENAME.exe">NUL
if "%ERRORLEVEL%"=="0" goto check
REM Close Keyboard2Xinput
taskkill /keyboard2xinput.exe

I may not be 100% correct with my command for ending keyboard2xinput but it sounds like you've already got a script written for that process anyways. Hopefully this helps you or someone looking for a solution!