Title may be a little convoluted.

I put the following perams in my launch options:
http://i.imgur.com/8aNMRlK.png

This worked fine except for the fact that new PAAs were saved to the same location in a folder called "Squads"

It sounds like it's not a big deal that that would happen, but it appears that the game is still trying to read from the squads folder under C:\Users\Andrew\AppData\Local\Arma 3\ in my case, a folder that hadn't been updated since 2014.

Unless there's a command to redirect that, I believe it's impossible without symbolic links to change your profile path and to be able to see squad logos in MP.