TransDEM will handle it.
Open the route for editing in Trainz Content Manager. Generate the new UTM tiles in TransDEM. The defaults for KUID usage in the UTM tile dialog should be OK. TransDEM may or may not reuse the KUID, i.e. it may leave the reference in the route intact or it may alter it. Therefore, it needs access to the route. In any case it will create new UTM tiles. Again, it may or may not reuse the existing KUID but will always recreate the asset behind it and apply the new texture.
After TransDEM is done, commit the route in Trainz Content Manager again and install all the new UTM tiles. When doing that in Content Manager, let the new UTM tiles replace existing KUIDs.
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and I've learned that TS12 does not allow you to merge routes that contain overlap,
That will never work. You have to remove overlapping baseboards before you can merge, in any version of Trainz. Best way is to avoid overlapping in the first place, by precisely setting the export mask when creating the route module in TransDEM.