Thanks for the details. Nothing seems special about this setup, especially not when it comes to the current observed problem. I also now tested with iPad Air 2 iOS 14.5 simulator: works.
Can you try to send the command to toggle fullscreen directly? For this please go to remote, press the gear icon, go to "more" aka "...", select "Execute a specific action", then scroll down to "togglefullscreen" and select. Please do not
filter and then select (there is a bug which will be fixed with the next version), but
scroll and select. This will send the same command as if you would long press the upper right remote button.
Is the toggle button working when only
tipping it (not long pressing)? It should toggle between a video being shown in the full Kodi window and a menu showing the playing content in the background.
Also helpful will be, if you could install TestFlight and install some of the older builds (see
TF build for Kodi Remote App). There are still 3 builds available which reflect the step wise changes from 1.10 to 1.10.1 and even the 1.10 is available for checking. Is there a specific version where this starts to fail for you?
Lastly and just to exclude such problem: Is the touch display working properly? Same buttons do not work, if you rotate the pad?