Ooh overlayfs is quite interesting. I'll have to take a closer look at that. I imagine it's similar to what MO2 was doing on windows with the virtual filesytem to keep the game directory clean.

The stow approach is something that I considered but ultimately rejected for a couple of reasons around handling conflicts of game-installed files as well as how to ultimately handle the symlink lifecycle (eg wrapper to make the "non-running" state always clean or to let it always persist and then need to run manual cleanup/update steps). But if you're interested in that approach when I was applying for Nexus Mods approval I discovered https://github.com/Marc1326/Anvil-Organizer in the overall list of mod tools which I believe uses that strategy (though I haven't really looked too closely)

But basically my original idea to just install the files directly into the game directory stems from the fact that when I switched to linux for gaming and not having success with MO2 that's literally what I was doing. I would download the mod from nexus and unzip/tar it into the game directory manually. When I wanted to uninstall or update I'd find the original archive list the files in it and then delete them from my game directory. After doing this too much I realized that I was basically missing the functionality of a standard linux package manager (eg apt, pacman, etc)