Didi you give the mod time to update and download?
Not sure how Kotor handles it but in Skyrim when i click Play in the library, it checks for updates of subscribed mods, and updates/downloads them if needed.

I suspect it's meant to do the check, but it seems to not do so as of this moment (I share OP's problem).

I am also having this issue, and have tried troubleshooting it in the same ways...

I have the same problem.

I tried installing it manually and then copy the content from the override library in my non-steam installation; didn't change anything.

try unsubscribing from all mods. Close restart steam, log back in, and try subscribing again. Make sure the download is clear from the list as well. That got mine to work.

If you have legacypc activated in Betas, mods through Workshop and the new update will not work. Try istalling it manually: http://deadlystream.com/forum/topic/3030-tslrcm-184m4-78ep-12-released/

I don't care for the new main menu as long as I can play the game with the new contian and not have to deal with a game breaking bug (If that does happen I'd unistall the mod and wait for it to be fixed after I reloaded a early save and try it again) so main menu gliched for me dont care not a big thing need to be honest