Selected by the menu at GameMenu. Bits 01 and 02 hold the control method read by ReadControls:
Value
Control Method
00
Keyboard
01
Kempston Joystick
02
Cursor Joystick
03
Interface II
Bit 03 is never set by the menu or by anything else, so the game never uses what it would do: it would make the menu flash the line that starts the game, make TestPickupDropKey read the action bit from one place lower, and make HandleTurning move the player by itself.