I seem to have re-discovered my workaround:
A) Divinity seems to be moving its profile folder. When I first installed it, it created "Larian Studios" directly on C:/. After updating to .72, it correctly created it in the Documents folder. Now, at .78, it creates it in Program Files (x86). Is this intentional?
B) Instead of the modsettings.lsx file, it creates a FOLDER of that name, which is of course empty. Deleting the folder and copying modsettings.lsx fixes the problem, presumably until next update. This is definitely not intentional - should I report it? Where?
Thanks!