For the manual install, xenonauts.exe will not copy over to the game directory.
If you extract the file and try to copy it over to the folder it will give you access denied. And, if you try to extract it directly with 7zip it won't copy over either. What will happen is, all the files will copy over except for xenonauts.exe (therefore, you will not see "Xenonauts Community Edition" in your launcher)
To fix this issue, I extracted xce-035 to a temporary folder in my downloads folder. Then I went to properties in Xenonauts.exe then security>advanced>owner>edit>change owner to [my username]>ok. After that you should be able to copy without problem. If not go to Xenonauts.exe>properties>edit permissions>click full control by your username. Here is a link with pictures of the steps https://www.online-tech-tips.com/software-reviews/how-to-fix-access-is-denied-file-may-be-in-use-or-sharing-violation-errors-in-windows/
Thank you for all your hard work. I will enjoy playing this community edition :)