There will always be some inherent problems with inside-out tracking. When the controllers are placed so close to the camera lens that it cannot see or follow the tracking markers, no amount of software is going to be able to completely compensate for this
The v1.39 update is probably using the built in inertia sensors to do dead reckoning tracking while the controller are close to the cameras. So it will only work for a little while (seconds) before the inertia sensor errors accumulate and the tracking solution degrade to a point that is unusable. Meaning it will work just fine for when you controllers are only sporadically getting to close to the cameras (Beat Saber and friends), but not if you want to hold them close for an extended amount of time like when doing a boxing guard or sniping with a rifle scope.