Ah, did you have a previous version of BUG installed to the CustomAssets folder? I believe that the INI files inside the My Games/BTS/BUG Mod folder are the ones being used by BUG 3.5.1 right now. You can check this by looking at the modification dates of the INI files inside the folder and comparing them to those in "BUG Mod 3.5.1/BUG Mod".
When you install BUG 3.6, simply remove the BUG Mod folder inside it: "BUG Mod 3.6/BUG Mod". You may want to copy the .chm (help) files from it to the BUG Mod folder in My Games/BTS.
Yes, I know this is confusing. I will be renaming the "BUG Mod" folder (adding "Settings") in a future release. If you want to see where BUG is looking for INI files, open the BUG Options screen (ALT + CTRL + O) and select the System tab. Look at the Search Paths list. BUG starts at the top and looks for each INI file going down the list. Typically you would have them all in the same folder, but that's not required. It only lists paths that actually exist.