Texture Replacement is an SCP feature implemented by Goober5000 which allows the user to alter the specific texture maps applied to pre-UVed chunks of the ship. As the name suggests, it does not alter the way these maps are applied in any way, but simply replaces the ingame data used for the ship. It's primary use is to allow premade nameplates for ships like the Orion and the HTL Fenris to be swapped on a per ship basis without the need for multiple table entries.
Texture replacement can be accessed through the Ship editor (Accessible by Shift-S, right clicking a ship, or through the Editors menu).
Two types of texture replacement are available: Regular and Duplicate Model. Regular runs just as fast as (in some cases faster than) a model with no replacement textures and consumes no additional memory. In contrast, Duplicate Model must load and reskin an entire additional model into the game for every ship that uses it, and on top of that it tends to run slightly slower.
In summary, always use Regular replacement - do not use Duplicate Model unless troubleshooting for bugs.