I seem to have the same problem like you. When I try to record my guitar/bass via one of the inputs, my DAW will immediately pick up everything that it sends to the interface, in other words: input 1/2 seems to be the same as output 1/2. One way of coping is to send your output to another device, your internal audiocard/-chip for example. That will solve the problem, however, remains rather unsatisfying to me, cause once I have an interface, I surely want to use it both ways.
The position of of the DAW - INPUT fader does not affect this issue.
As far as drivers are concerned, I’ve tried both the latest Yamaha Steinberg USB Driver V1.9.9 and ASIO4ALL_2_13 and am pretty sure that the configuration of my channels is fine.
I’m looking forward to any suggestions on fixing the issue and ask you for forgiveness is there is already a solution out there I didn’t find
Thanks a lot