Errortrap and Overwatch- what am I doing wrong?

There are three and only three things that belong in the Mods folder.
-- A subfolder called Packages
-- A subfolder called Overrides (usually empty)
-- The required Resource.cfg file

That's it. The extracted .package files go into the Mods\Packages subfolder. It doesn't matter what method or combinations of extraction, decompressions, cut, copy, paste, drag and drop one uses to get them in there.