Just thought I'd leave a final note here on this topic. Placing a full fledged .eng file (not an include) in the OpenRails folder does cause Open Rails to take it and supersede the standard eng file in the main folder.
I did a simple test. The original eng file had (erroneously) combined controls for the throttle and dynamic brake. In the OpenRails folder eng file, I removed this line completely from the eng file and it did work as expected in the sim.