I got a response from support saying "You will want to use the in-game connection with IP option after this recent patch. Steam being unable to query the server software is not something we will able to solve ourselves as we are not the game developers."
I accept something changed with this patch but I have another server with 4netplayers and that works fine through steam with this new patch, so I don't believe it's totally down to the patch but also some server configuration is required. For my other server I do exactly the same thing in steam, that is add the ip address and port in the format <ip address>:<port number> but the port number is +1 e.g. on the server admin page the port is 2456 so I put 2457 in steam. This works fine.
It's not clear to me why Nitrado servers don't work through steam. I can connect in game by connecting to the ip address and port shown on the server dashboard.