First step would be to tell Kontakt which parameter you would like to control, using the “Instr. Midi Control” device (this is how you establish the connection between your hardware controller and the plugin). Configure the device to transmit CC1/CC2, then try moving the slider to confirm that it’s working.
Next you would want to map your controller to those sliders. This can be done in the traditional way (CTRL+M), or by using Duplex. Assuming we are talking Duplex here, a nice thing here would be to stick an XYPad into the DSP chain (next to the Instr MIDI Control device) and add a Duplex XYPad application to the mix. This will make any/all XYPad automatically become the target of your joystick as you are playing.
I just created a layout that contains these modifications. Not sure about the joystick being CC1/CC2, because the existing controlmap clearly specifies that the joystick is using CC60/CC61 - and I don’t have the Korg editor software installed. I just went ahead and used your values anyway, but if we are ever going to publish this as an official Duplex template, the controlmap should of course reflect the values being used in the .mkd file.
Instructions:
Add the XY Pad device, and map each axis to the CC sliders in the Instr. MIDI device