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Brakes apply automatically with throttle lift

Playing Assetto Corsa with a Logitech Momo FFB Wheel (I'll be replacing it later this year, but trying to make it work for now), I've noticed that when I lift off the throttle completely, my brakes are applied completely on their own, and rather than coasting, the car quickly grinds to a halt (regardless of gear). I've tried adjusting the settings, and at one point I changed something that removed this effect (not sure what setting I changed), however, it also made the car feel like there was no engine braking or rolling resistance in corners and became impossible to control.

Does anyone know what would cause the brakes to be applied automatically after lifting off the throttle, and how to adjust this for a more realistic feeling?
Things that come to mind:
- you have pedals set in "report combined pedals" mode (outside of game setting) i think it comes "on" by default, and it should be "off".
- you have hand brake on all the time (check control assignments)

Haven't ever heard about that "impossible to control, no resistance" at best it could be something with auto clutch, but it also could be actually normal car behavior.