Just reporting back - I haven't managed to track down what might be causing this but its potentially something to do with the game no longer being available on Steam. That said, I'm not sure what that would be - I'll keep trying to track down the cause when time allows, it may require a new build and stripping out any Steam related functionality.
Viewing post in Won't launch because it can't find a Steam licence.
It’s possible, regardless thank you for trying. All I could personally comment on is that I’ve ran many types of launchers, configurations and games before both on and outside itch.io and I’ve only came across this issue two or three times at most. I distinctly remember there being a total conversion horror mod someone published on here doing that, but I can’t recollect the name at the top of my head. Never got to play it either, then again that developer/modder vanished.