I have the same Error and I can reproduce it.

Steps to reproduce:
System Information:
I'm also experiencing this issue, with my entire PC crashing shortly after. VR works fine without the overlay.
Distribution: Arch Linux
SteamVR version: 1.23.4 (1656015888)
Steam client version: Jul 2020 at 22:13:33
Opted into Steam client beta?: Yes
[~] glxinfo | grep -iE 'vendor:|device:|version:'
GLX version: 1.4
Vendor: AMD (0x1002)
Device: AMD Radeon RX 5700 XT (navi10, LLVM 14.0.6, DRM 3.46, 5.18.9-arch1-1) (0x731f)
Version: 22.1.3
Max core profile version: 4.6
Max compat profile version: 4.6
Max GLES1 profile version: 1.1
Max GLES[23] profile version: 3.2
[~] lspci -k | grep -EA3 'VGA|3D|Display'
0b:00.0 VGA compatible controller: Advanced Micro Devices, Inc. [AMD/ATI] Navi 10 [Radeon RX 5600 OEM/5600 XT / 5700/5700 XT] (rev c1)
Subsystem: Sapphire Technology Limited Sapphire Technology Limited Navi 10 [Radeon RX 5600 OEM/5600 XT / 5700/5700 XT]
Kernel driver in use: amdgpu
Kernel modules: amdgpu
Nothing extracted yet.
What's the bug?
On HL: Alyx game exit, sometimes, in cases where some parts of Steam may have crashed during gameplay, "relaunch" of certain processes may fail
Repro
Scenario unknown
Expected behavior
For the KIO Client to launch the right script. I think it's missing a part, namely the helper script itself
System Information :
Screenshots

Additional context
This looks like some weird association glitch.