When this problem happens, you’ll notice that moving the arrow keys around just moves the cursor around the page. Annoying!
The problem is because you tripped the Caret Browsing feature at some point, and accidentally hit Yes.
To fix this, you can just hit the F7 key again. Or, if you want to do it the about:config way, filter by accessibility.browsewithcaret and make sure it’s set to false.
Remember, you can double-click on any boolean value to toggle between true and false.