Dracut may have this functionality already built in via rd.luks.key, so a custom module would really only make sense if you're trying to do more than that. You can probably get away with just using that if you just want it to work, but if you want to customize stuff:
I suspect your module is running well after the device is already supposed to be cryptsetup opened. The way the default crypt module handles it is by setting up udev configuration in a very early phase, and then having udev request the password a little bit later when it finds the device it's trying to open, until all devices are ready. It's a complex mechanism compared to Alpine's straightforward script, but it's much more flexible when it comes to ordering of things like RAID/network devices/LUKS/etc.
The result of that is that your code would have to run much earlier. There's some documentation on how hooks work, and the builtin rd.luks.key / keydev handler runs at cmdline 10. That's well before your pre-mount, and probably where you'd want to run your code. Based on a cursory inspection of the other code, you could either cryptsetup open it yourself if you use the name it expects (rd.luks.name= cmdline parameter or luks-$luks_container_uuid), or you could use that /tmp/luks.keys mechanism (it's a dracut-internal thing so you won't find much documentation, but it lives in crypt-lib.sh, cryptroot-ask.sh and probe-keydev.sh).
As for debugging, the cmdline manpage has a few decent enough options. rd.break=cmdline or similar can force a shell before Dracut goes through a specific phase of hooks. You should be able to manually test doing things similar to your script at that point.
It technically still exists in the game properties -> installed files tab, but it doesn't really work. The backup files you get require you to be online to meaningfully restore and will trigger a patch to the latest game version.
Practically speaking it's better to just make a copy of the game install directory manually, gives you a better chance of things working (even though most games require some kind of external tooling for that).