I seem to have this issue as well. Was pointed here from Outsetini/Air-for-Steam#161.
Steam client version (build number or date): 1503954609
Distribution (e.g. Ubuntu): Ubuntu 16.04.3 64-bit
Opted into Steam client beta?: [Yes/No] Yes
Have you checked for system updates?: [Yes/No] Yes
I got it to work if I instead put the Air folder in ~/.steam/skins/. Not sure if this is a bug or feature or what.
Can confirm that putting skin folder into ~/.steam/skins does indeed work.
I got it working by making a directory called 'skins' in ~/.steam/steam/
Nothing extracted yet.
Your system information
Please describe your issue in as much detail as possible:
Describe what you expected should happen and what did happen. Please link any large code pastes as a Github Gist
Tried installing Air skin for Steam. After putting skin folder into "~/.local/share/Steam/skins" and restarting Steam skin doesn't show up in skin dropdown menu. Tried restarting Steam multiple times, tested also with Metro.
Steps for reproducing this issue: