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https://www.nvidia.com/object/physx_system_software.html
You should never have to swap DLLs manually. A properly installed driver will automatically install the latest versions of both the 32-bit and 64-bit versions in the correct locations.
All of this copy and paste advice is "safe to ignore" and should be ignored. Although it may work in some cases, copying and pasting system files is never a solution, but at best a workaround. This kind of advice comes from people who don't know much about computers.
If you manually copy and paste PhysX.dll from one location to another, you are essentially either replacing a newer version of the file with the older (or vice versa), or replacing a 64-bit version with a 32-bit version (or vice versa), depending on what you copied and pasted from where.
However, your problem here is not related to PhysX, so it's not surprising that reinstalling it won't help. In your case, the correct PhysiX file is (or was) there, but it can't be seen/found.
You are trying to play a 32-bit game on a 64-bit operating system, and you are missing the 32-bit versions of the game's prerequisites. On a 64-bit machine, you need to install each version of vcredist as both 32-bit and 64-bit versions if you want to play 32-bit and 64-bit games.
Essentially, you are missing the correct version of the Microsoft Visual C++ 2005 Redistributable (which is a 32-bit version) and possibly UE4PrereqSetup_x86.exe.
Life Is Strange is built with Unreal Engine 4, which uses the Microsoft Visual C++ libraries to build games, and games built with it require the same version that they were built with.
The Microsoft Visual C++ 2005 Redistributable is very old and no longer supported by Microsoft, and it has a known and unfixed security problem, which may be why it didn't install automatically. I don't know.
UE4PrereqSetup_x86.exe should be in the "C:\ProgramFiles(x86)\Steam\steamapps\common\Steamworks Shared\_CommonRedist" directory, or you can get it from another UE4 game.
https://steamcommunity.com/app/319630/discussions/0/2962768085011536645/
The easiest way to solve the mess of Visual C++ Redistributable Runtime versions at once and for all games is to use the "All-in-One" version offered by the TechPowerUp team.
https://www.techpowerup.com/download/visual-c-redistributable-runtime-package-all-in-one/
I can't tell you what and why has changed in your case, even less if you used to copy and paste some system files.
Mysterious problems like "it used to work, but now it doesn't" are exactly why you should avoid copy & paste.
In your case, I would definitely reinstall the video driver, reboot, install those prerequisites, reboot, have Steam check the game files, log out of Steam, restart Steam, and see if the game starts.
If not, I'd go to the games folder, right click on the executable, and try to run it directly in compatibility mode (e.g. Windows 7) and "as administrator".
If it still doesn't start, it might also be a system security issue (antivirus, DEP execution prevention, etc.).
LIS is actually an exemplary game that runs on almost everything. It even runs on Linux, under WINE, and on a pretty old machine.
https://steamcommunity.com/app/1642130/discussions/0/3049485912459242685/
Timeline:
Game worked
Computer had problems
Had to reinstall Windows
Downloaded Steam and then Life is Strange
FATAL ERROR
Looked up how to fix it
Did what people suggested