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It works beautifully in MAME too! You just have to use a certain setting to have it work as you intend. Try this command-line argument:

-keyboardprovider dinput

This way you force MAME to choose DirectInput, instead of choosing its input method automatically.

What this means is that it will be able to properly "see" the configuration you've assigned in the Steam Controller software. If MAME is left to choose its input method automatically, it will assume either of the following (according to your chosen configuration):

That the SC is a keyboard and mouse combo. In this case it uses the SC in its infamous lizard-mode, providing limited functionality.
That the SC is an XInput controller, in which case it will use the assigned XInput controls properly and ignore any controls related to a keyboard or mouse.