SideshowleakyI do have "Hide file name extensions" disabled
I assume you mean enabled?
The most likely thing I can think of is steam cloud fucking up, that thing is a bitch. Try enabling steam cloud inside steam, then disabling it for TF2 and make a new cfg file again. If that doesn't work, disable it inside steam for all games too (unless you need it for another game of course).
Steam was already enabled in Steam and disabled in TF2, so that can't be it. I'm going to try disabling it for Steam aswell and see if it detects my cfg files. It seems as though it isn't detecting my custom folder at all.