Been looking into this further and found that it only affected affected
one account on the computer - the other accounts worked as expected.
Eventually found that the impacted account had a syndaemon command
running at Startup to disable the touchpad whilst typing, as this
function didn't work in System Settings. However, the setting to Disable
touchpad whilst typing was still set in System Settings. Turning off
this setting seems to have cured the problem. Obviously the original bug
that causes the "Disable touchpad whilst typing" system setting not to
work still needs to be addressed.

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https://bugs.launchpad.net/bugs/1387562

Title:
  Touchpad settings ignored

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