You'll need to manually switch to Analog in the Options>Controls menu. The way this works for melee combat is you need to hold down the Left Trigger, then use the Right Thumbstick to attack. If you want to chop off a head for example, pull the thumbstick all the way to the left/right and then quickly flick it in the exact opposite direction. It takes some getting used to... however, you can avoid any hassle by simply using guns, kicks or thrown weapons the entire time the settings are enabled. If you play in co-op and have a friend do all the work, you'll want to make sure you hit at least one enemy each wave for it to count.