It overwrites the files. It is not exactly a "patch". It is a direct replacement. Like if you unzip something to a folder.
So, if you have customized your "starfleetOP.exe" or "sprites.q3", it is better to make a backup.
Basically, for the HD to work, you just need those 2 files. But i recommend also overwriting the "aaStrings.txt" and "tooltips.txt" files.
You don't need to install the other things. They were used to make the HD project, but are not required to make it run.
You can right-click on the auto-installer, open it, and see what it contains. It was made with winrar.
I did it this way, cause the average person, would not have patience to make all the changes to enable it. Or even know how to do it.
I spent like 2 hours just tracking the images, and editing them, for them to look nice.
I imagine, some people would not even bother to open the sfc_Editor or q3_editor to see what it does... imagine now spending 2 hours to change their personal copies manually.
If you customized your exe, it is easier to replace it, and open the SFC_Editor and change what you need.
You can also open the q3_editor, and import all the images you have into the sprites.q3 with just a keybind.
I think that this is the easiest way to the end user to enable it.