Hi, sorry for the delay in updating this thread but unfortunately unforeseen circumstances delayed my response. Not sure how this will help others but I have successfully run subscription apps and games directly from the Vive portal and Library.
I am not sure whether Vive have updated something their end or whether what I did made any difference. But this what I did :
The first installation of Vive and the Vive Library were on to my current working Windows 10 hard drive which had no issues, or antivirus installed (ever) and would run SteamVR without a problem and all games from Steam. Although wouldn’t allow me to run any of the Vive subscription games or applications and would pop-up an error message : Launch Failed : Viveport app does not launch (23204)
To try and get to the bottom of the issue I had a spare hard drive, exactly same as the first and carried out a clean install of Windows 10 with all the latest Microsoft updates. I then reinstalled Steam, SteamVR and Vive and set up the HTC Vive headset without installing anything else. The size of the play space had increased slightly this time around. To my delight the first application I downloaded from the Vive Library booted as expected with no issues or error messages.
I did notice that during my installation that the process updated my Cloud SteamVR files due to the new installation and setup of the Vive headset and sensors. I didn’t think anything of it at the time but continued to test whether games and applications would indeed run from within the Vive Library on the new hard drive, I downloaded a few and they ran from both Steam and Vive Library without any issues.
I then booted the first hard drive which had been experiencing problems, and ran the already installed SteamVR and Vive applications, and to my amazement the applications ran without any issue or showing the previous error message directly from the Vive Library. If Vive have not changed anything on their server or Library then I think the update to the Cloud settings may have corrected the issue. Although I can’t be 100% sure, however everything now works perfectly on both drives.
If you still need the log files I can send them over via PM