When I upgraded to Sierra, my shift key on the external keyboard stopped working when I press a key on my MacBook Pro Retina's keyboard. I have a setup where my left hand is using the external keyboard (to avoid pain due to chest compression), while my right hand is on the MacBook's keyboard.
Now when I press the left shift and a letter on the MacBook keyboard, the letter does not come capitalized. In El Capitan (and all other versions) this worked...
it's not just shift. It's command, alt, shift, control.
the modifier keys do work physically (when used with other keys on the same keyboard).