It looks like steam has been updated, I now have the "combined operations" option at launch. However I still remain unable to use it like the other methods due to:
No entry: arma 2 dir*\bin\config.app\CFGingameUI\MPtable.shadow
arma 2 dir*\bin\config.app\CFGvehicles\AH1Z/HitPoints/:Cannot find base class 'Hitpoints'