One of the confusing bits in FE is how items gain their graphics. I will try to explain it a bit here so it makes sense, also so modders can avoid some common mistakes with it.
Below is the Club XML quoted from CoreWeapons.xml:
<GameItemType InternalName="Club">
<DisplayName>Club</DisplayName>
<Description>A gnarled root of pine, ripped from the ground and fashioned into a club.</Description>
<Type>Weapon</Type>
<WeaponType>Blunt</WeaponType>
<CanBeEquipped>1</CanBeEquipped>
<AdditionalTrainingTurns>5</AdditionalTrainingTurns>
<ShopValue>15</ShopValue>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_Attack_Blunt</StrVal>
<Value>5</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_CombatSpeed</StrVal>
<Value>-4</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_CurrentWeight</StrVal>
<Value>10</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_BashChance</StrVal>
<Value>100</Value>
<Provides>Bash- Has a chance equal to the damage done of knocking the victim prone</Provides>
</GameModifier>
<IsAvailableForSovereignCustomization>0</IsAvailableForSovereignCustomization>
<RarityDisplay>Common</RarityDisplay>
<Prereq>
<Type>RestrictedAbilityBonusOption</Type>
<Attribute>GreatHammers</Attribute>
<Target>Player</Target>
</Prereq>
<AIData AIPersonality="AI_General">
<AIPrefType>AIPrefType_BLUNT</AIPrefType>
<AIPriority>80</AIPriority>
</AIData>
<ArtDef>Club_ArtDef</ArtDef>
<GameItemTypeArtDef InternalName="Club_ArtDef">
<GameItemTypeModelPack InternalName="Club_Default">
<IconFile>W_Club_Icon_01.png</IconFile>
<TintR>0</TintR>
<TintG>0</TintG>
<TintB>0</TintB>
<AttackSFX>Hit_Club1</AttackSFX>
<AttackSFX>Hit_Club2</AttackSFX>
<EquipSFX>Equip_WoodenItem_01</EquipSFX>
<EquipSFX>Equip_WoodenItem_02</EquipSFX>
<EquipSFX>Equip_WoodenItem_03</EquipSFX>
<OnHitParticleName>Club_Attack</OnHitParticleName>
<GameItemTypeModel>
<ModelFile>gfx/hkb/Weapons/K_Club_01.hkb</ModelFile>
<Texture_All>K_Weapons_Basic_Texture_01.png</Texture_All>
<Attachment>hand_right_Lcf</Attachment>
</GameItemTypeModel>
</GameItemTypeModelPack>
</GameItemTypeArtDef>
</GameItemType>
The first thing you need to realize is that - despite how this appears - GameItemTypeArtDef is NOT a child tag of GameItemType. That means it can appear completely on its own without being inside a GameItemType. It is fully stand-alone. For example this bit below would give identical results to the bit above:
<GameItemType InternalName="Club">
<DisplayName>Club</DisplayName>
<Description>A gnarled root of pine, ripped from the ground and fashioned into a club.</Description>
<Type>Weapon</Type>
<WeaponType>Blunt</WeaponType>
<CanBeEquipped>1</CanBeEquipped>
<AdditionalTrainingTurns>5</AdditionalTrainingTurns>
<ShopValue>15</ShopValue>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_Attack_Blunt</StrVal>
<Value>5</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_CombatSpeed</StrVal>
<Value>-4</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_CurrentWeight</StrVal>
<Value>10</Value>
</GameModifier>
<GameModifier>
<ModType>Unit</ModType>
<Attribute>AdjustUnitStat</Attribute>
<StrVal>UnitStat_BashChance</StrVal>
<Value>100</Value>
<Provides>Bash- Has a chance equal to the damage done of knocking the victim prone</Provides>
</GameModifier>
<IsAvailableForSovereignCustomization>0</IsAvailableForSovereignCustomization>
<RarityDisplay>Common</RarityDisplay>
<Prereq>
<Type>RestrictedAbilityBonusOption</Type>
<Attribute>GreatHammers</Attribute>
<Target>Player</Target>
</Prereq>
<AIData AIPersonality="AI_General">
<AIPrefType>AIPrefType_BLUNT</AIPrefType>
<AIPriority>80</AIPriority>
</AIData>
<ArtDef>Club_ArtDef</ArtDef> </GameItemType>
<!-- line space wee -->
<GameItemTypeArtDef InternalName="Club_ArtDef">
<GameItemTypeModelPack InternalName="Club_Default">
<IconFile>W_Club_Icon_01.png</IconFile>
<TintR>0</TintR>
<TintG>0</TintG>
<TintB>0</TintB>
<AttackSFX>Hit_Club1</AttackSFX>
<AttackSFX>Hit_Club2</AttackSFX>
<EquipSFX>Equip_WoodenItem_01</EquipSFX>
<EquipSFX>Equip_WoodenItem_02</EquipSFX>
<EquipSFX>Equip_WoodenItem_03</EquipSFX>
<OnHitParticleName>Club_Attack</OnHitParticleName>
<GameItemTypeModel>
<ModelFile>gfx/hkb/Weapons/K_Club_01.hkb</ModelFile>
<Texture_All>K_Weapons_Basic_Texture_01.png</Texture_All>
<Attachment>hand_right_Lcf</Attachment>
</GameItemTypeModel>
</GameItemTypeModelPack>
</GameItemTypeArtDef>
A GameItemType is linked to a particular GameItemTypeArtDef by the <ArtDef> tag in the GameItemType (bolded in the quotes above). This is how you decide what graphics an item has.
When you want to overwrite a GameItemType from the /mods/ folder, you can do so with relatively few pains. Everything just gets deleted when you overwrite the old one, and only your new values get read in. This is not the case for the <GameItemTypeArtDef> and its children. Instead of removing all previous tags when you overwrite it, the game simply adds your new ones to the already existing ones.
Thus, if I want to change the icon for the club above all I would need in the GameItemTypeArtDef is this:
<GameItemTypeArtDef InternalName="Club_ArtDef">
<GameItemTypeModelPack InternalName="Club_Default">
<IconFile>mynewicon.png</IconFile>
</GameItemTypeModelPack>
</GameItemTypeArtDef>
because all the old values are saved when I add new values.
This means that when you are copying an item from the installation folder, you should not be copying any <GameItemTypeArtDef> unless you intend to create new ones or modify existing ones. If you simply want to make a stronger axe with the same graphics, you should leave out the GameItemTypeArtDef completely because it already exists in the installation directory. The <ArtiDef> in your item will link to the existing values.
This is actually important to get right, because I see mods popping up that are copying the whole <GameItemTypeArtDef> inside the items without making any changes. This means that you are inserting new models into an already existing modelpack. If the model is already defined in a <GameItemTypeArtDef> in the installation directory and you copy it, you are creating another one in the game. That means the game now has to render two clubs. There are also other issues such as mounts piling on each other.