First, to overwrite files in the VFS area you must make sure that the "Allow write to VFS" checkbox on the advanced tab of the sequence editor was selected for your package. But even with that (in spite of the actual wording on that sequencer checkbox about "Full"), you may not overwrite executable files (exe, dll, tlb, etc). This is by design.
You can keep the original files out of the package, make sure the folder is "Merge with Local", and use a script that is not in the virtual environment to copy the file natively to be found.
We are trying to embed a simple copy script inside app v 5.1 dynamic config (userconfig.xml) file. The script should copy some files (including dlls, exe) from server location to the VFS folder in the client during launch of a particular application inside the package. But it is not copying exe, dlls, subfolders (only copying files with TRF, DAT, RTP). The script has been given below. Please help us to overcome this issue.