This has been noted in past versions, with the workaround as you describe. If the file is open in a viewer, overwrite won't succeed.
But in several tests of beta 7.25 overwrite worked well.
For licensed users upgrades are free for up to six months. After that, VP will continue to fully function but a fee will be required in order to register the newest.
Retain your old install file. It normally archived in this path: "C:\Program Files (x86)\NCH Software\VideoPad"