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What antivirus are you using, and have you checked to make sure its not one of those known to interfere with steam? A few are known to break game/client files. Whitelisting the steam folders usually fixes this, and you could find out how to do so fairly painlessly though google.
Nuking all the steam files and keeping only the .exe could work, in theory, but hasn't - so there may be a chance the actual .exe file is corrupted in some way. Have you tried downloading a new installer from the website, and running from that?
And, finally, by the sounds of your safemode issue - it sounds like your running either win 8 or win 10. This is actually a pretty common issue, seemingly because in safemode with networking, it might not actually see the wireless network, and in turn, not be able to verify your password. Some people have said using the on-screen accsibility keyboard has fixed this issue, or using an ethernet connection. I can't remember for the life of me if you can actually remove your password on a windows 8/10 machine, but that could be worth a shot too.
Right now, I don't have any antivirus running on my PC, I had BitDefender a few months ago but Steam worked flawlessly with and without it. Also, I tried downloading a new installer directly form Steam website, not some third-party websites.
And about the safemode issue. It's actually my ethernet connection that's not recognized, I also have a wireless antenna but doesn't work either on that login. Yup, tried that on-screen keyboard workaround but still no results. I don't think you can remove the password since it's connected to my Microsoft account. I'll try and make another account without a password, maybe that'll work. Thank you for your reply.
And while I know you said you reasearched the problem already and have tried a lot of things, I found something that might be useful.
The first step would be deleting the "package" file (although back it up somewhere, just in case) from the steam folder so a new one is generated. Although it sounds like you already did that.
Then (or without doing the above at all, not sure if there would be any real difference.)
Disconnect your machine entirely from the internet, and run steam offline. before reconecting and restarting steam (if it ever starts up).
Disconnecting the PC from the internet does some weird things. First, I got a message that Steam needs internet acces to download the updates, and then GUESS WHAT?! I'm at the "extracting package" window, AGAIN, while disconnected from the internet.
As far as Safe Mode goes, doesn't matter how many local accounts I create, the one that Windows it's gonna log into Safe Mode is the Administrator one, which is password protected with a password that I KNOW and DOESN'T WORK ..
Really, I keep seeing people having the same problem as me, and so far only you replied here. Thank you.
The issue seems to be with steam updating, right? Getting half way there, then crapping it's pants, I guess. So I have ~one~ more idea, not one that I've tried with steam or other programs. Although you will need another machine (preferable with admin rights too).
Install steam on a machine that doesn't otherwise have it, (a library might do? Idk) and let it do its thing, updating and all. (If it does.) Then get a USB stick and just, move the files from the steam directory into the stick, and use them to overwrite your existing, somehow broken file structures.
I have no idea if that will work and I probably explained it poorly but, it's helped me in similar ish situations with other softwares
This doesn't work either, the client just downloads a 44mb update and then the same issue, extracting package. Feels like I'm extracting the entire Pentagon and NASA database ... Anyway, I'm out of options. Maybe it's my internet, maybe it's Windows. I'll just fresh install Windows again and then try again. if that doesn't work either, I'm just gonna delete it altogether. Thank your for the help.
I fixed it like this:
1. Go in Settings > Updates & security > Windows defender > Turn off everything except Real time protection ( I did turno off that one also, but all it can do is froze your PC)
2.Go into your Steam folder and run it as administrator.
3.If it doesn't help try turning off Windows Defender.
I hope it will help .
Give me some feedback tho.
EDIT: I did delete steam including all my games, but I don't think it is necessary to do that.
I can confirm that DISABLING Windows Defender worked for me. Thank you very much!!