I reimaged the ReTerminal with the latest 64 bit OS image you provided, and then installed the dtoverlays you provided. I’m still having the same problem, whereby the image from the DSI touchscreen overlaps onto the HDMI screen. Unlike the images you showed of your ReTerminal working in mirroring mode, the default behavior (at least of the provided instructions) of ReTerminal at present is to not be mirrored between DSI and HDMI screen. It would be great if instructions for mirroring were provided.
Something that may help troubleshoot the issue is that when my external monitor is connected after the ReTerminal is started then there will be no screen overlap and the screen canvas will be 3200x1080. However, if the HDMI is connected at time of startup then the overlap will occur, and the canvas size of screen 0 is 2640x1080.