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I couldn't find any straight answers on the internet other than 'run Bluetooth Troubleshooter' and 'uninstall drivers' and 'reinstall Windows' - However, I did stumble upon a fix on a Dell forum for similar issue. When I wouldn't move the mouse for a few moments, when I would go to move the mouse again, it would be unresponsive for a small moment and then finally respond to my mouse movement. I got the Arc Mouse as well, and I love the portability, the feel, the accuracy, and the way it turns off when laid flat. I just got a Surface Pro 8, and I love everything about it. So I am not sure which one it is, but it is fixed for me now.
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When this originally happened, I tried the u/KnightWanderer fix and it didn't work, until after I installed the Intel Bluetooth driver. This issue came back (probably after an update) and it was u/KnightWanderer's fix below that actually fixed it the second time around.
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