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It started only today when I updated my Steam and Mac.
That is the only soultion I could find. Make sure you have a good backup, beside Time Machine. I would suggest SuperDuper or CarbonCopyCloner to make a bootable backup and make sure you test booting from it before your erase your drive.
Because Apple has given NO warning over the past two years that this is happening, and they haven't had case-sensitive file systems of some sort or another for years, either, Steam must be just completely caught off-guard by this predicament.
Reformatting my system to case-insensitive file system is the ONLY valid option - because Steam fixing their app is too large an ask.
This is incredibly short-sighted/blind of Steam to just release an update that broke so many people's use and denies them access to their library.
BUT. THIS IS SUPER DUMB AND VALVE SHOULD FIX IT. THIS OS HAS BEEN OUT FOR A WHILE NOW AND CASE-SENSITIVE APFS IS THE DEFAULT VOLUME TYPE FOR NEW INSTALLATIONS AND MACS. /rant
this.
+1
[citation needed]
I haven't heard anything (nor can I find any documentation) on the default changing to case-sensitive APFS. I can, however, easily find documentation which suggests case insensitive is the default, e.g. https://support.apple.com/en-gb/guide/disk-utility/file-system-formats-available-in-disk-utility-dsku19ed921c/mac
I'm running the Mojave beta because I'm a lunatic developer (just adopted signposts[developer.apple.com] in my app and it's pretty great) and Steam works just fine on it.
The idea is to mount a case-insensitive partition or dmg file on the folder.