Hey, I was just reading what you are saying and I know, that you probably did it differently, but I have never had these problems. I installed the TATW in a way, that everyone does, but I didn't change any names of the folders. What I did was this:
1st: Go to steam, right-click on Med 2 and go to properties
2nd: Go to General and there click on set launch options
3rd: Copy and paste this into the pop up and click ok --features.mod=mods/Third_Age_3
4th: Launch the game and when you get the option, choose to play the base game. It will start the TATW mod or any sub mod, you are using.
Hope this helped