I installed Posy’s Improved Cursors from the System Settings app, however some apps do not use the updated cursor, like the window title bars and Steam.
It defaults to the KDE Classic cursors on the apps it doesn’t support the new cursor.
Because I downloaded the cursors through the gui, I’m not sure where they’re installed if I want to update the index.theme
Everything under /usr/share is the systemwide stuff. Given that you’ve installed the new cursors through the System Settings, you will have installed them in your home directory, and user-specific settings will always override the systemwide settings.
I’ve noticed that this issue is only present with extra cursors downloaded through the kde settings gui. Built-in cursors such as Adawaita don’t have this issue.