So restoring the default legacy mods folder in the launcher to "C:\SteamLibrarySSD\steamapps\common\ArmA 3" fixes the issue with the corrupted mods. Doing the "Find in Folder" option does show the normal hidden "!Workshop" folder, "C:\SteamLibrarySSD\steamapps\common\ArmA 3\!Workshop".

If I then switch it back to my normal "G:\ArmA 3 Mods" folder all the mods get corrupted again. I can still use the "Find in Folder" option and it does correctly show as "G:\ArmA 3 Mods\!Workshop" but all mods are still corrupted.

May I ask you, did you ever manually modified or deleted mod from Steam Workshop cache?

So far the only way I was able to replicate the issue was when Launcher attempts to fix the corrupted Workshop cache.

If I did it was not done intentionally.

The only way, that I can recall, that I've ever deleted a non local mod was via the trash can option in the launcher.

The "!Workshop" folders are normally hidden and I've only ever used the "find in folder" option really today to find the folders once I've noticed the issue.

Can you enter any of the mod folders in the G:\ArmA 3 Mods\!Workshop and for example open some file (e.g. readme) from there and some Addons folder in one if the mods? I came across an article about a bug in Windows 10 that would explain the errors in the log.

Could you please download this version of Launcher, unpack it to your Desktop or Documents and run it from there? If that is the issue I've original though it was (when fixing Workshop cache), it would be fixed. It that is the issue with Windows 10, then it won't be.

If I try to open a file when it's in the "G:\ArmA 3 Mods\!Workshop" location (such as Readme.txt or Changelog.txt) I get an error that the files does not exist (Opening in NotePad++). If I open it in normal NotePad I get an error that the system cannot move the file to another disk.

Trying to access the Addons folder tells me that it is not accessible. Here is a screenshot of the error.

As for the new version of the launcher, I cannot see where to download it.

Hello,
sorry for missing link, I'd to leave the office abruptly. But from your last post I can see that the it wouldn't help you at all, as the bug is indeed with Windows 10.

So far the only workaround is to place the legacy mod folder to same drive as where the game is installed. It shouldn't be a problem as it only moves the legacy mods, and there a small number of those and they are limited in size. All other mod are linked from Workshop cache location which is chosen by Steam can't be changed anyway.

I'm trying to put together a guide how to fix the issue with Windows and I'll get back to you when I gather more intel on the matter.

And also many thanks for your help.

Ahh, Good Ol' Windows 10.

If only they hadn't laid off their entire testing division and made their customers the beta testers.

It just so happens it was Amazon Prime Day on the 12th and I snagged a 960 GB SSD, ArmA III now resides there so having the legacy mod folder on the same drive as the install is no longer a big issue. Will still appreciate the fix in the long term though.

Thanks.