Questions for who have Arx Fatalis

Such a great game by such a great studio (Arcane). Unfortunately I can't help you as I only have the boxed version.
Oh to do magic, you literally have to draw the runes with your mouse. The runes form a language (to decipher yourself) from which (hidden) spells can be derived. And your magic level determines the tolerance to error while drawing the runes (hence level 1 you have to go slow and precise while level 5-6 almost any scribble works - reflecting the ease of casting). Final tip ; you can precast and store three spells using hotkeys.

Arx liberattis is a replacement exe so to say. It needs the data files from the game to run. Theoretically you just copy all the data into the arx libertatis dir omitting the binaries, eg exe/dll from the steam version.

Steam overlay should not work. The game would need to be programmed to make use of the steam api. Evolve overlay should work however as it does not need an api but injects his own stuff automatically.