I love the (somewhat) new pattern tool, makes copying/pasting midi data a breeze, especially for drum parts. For my application, I'm using the pattern tool to overwrite portions of the clip with data from another part. The problem is that it's merging the pasted data with the old data instead of replacing it. I couldn't find anything in preferences that seemed obvious, is there any way to force it to replace?

Try Customization > Editing > Drag and Drop > Replace Old with New

Yeah I tried that and it didn't seem to have any effect.