I always believed this game needed rotary joysticks, like Ikari Warriors, so I never played my PCB (characters were stuck shooting in a vertical position), but your video gave me an idea... maybe SNK programmed a normal joystick option, too? And that's exactly how it is: with dipswitch 8 you can choose between rotary and normal. Thanks for the hint awbacon!
It's probably more fun with rotary sticks, but it works pretty well.
P.S. I couldn't resist taking a photo... this game is heavily inspired by Aliens, and look what's behind the cab
(1986 italian movie poster in really bad shape)