Trying to build your suggested overlay file with torizoncore-builder fails. Here is the torizoncore-builder output:
2026-06-22 10:35:17,383 - torizon.tcbuilder.cli.build - INFO - Building image as per configuration file 'tcbuild.yaml'...
2026-06-22 10:35:17,383 - torizon.tcbuilder.cli.build - DEBUG - Substitutions (enabled): {}
2026-06-22 10:35:17,410 - torizon.tcbuilder.cli.build - INFO -
=>> Handling input section
2026-06-22 10:35:18,077 - torizon.tcbuilder.backend.images - INFO - Unpacking Toradex Easy Installer image.
2026-06-22 10:35:18,077 - torizon.tcbuilder.backend.images - DEBUG - Running tar command: tar -xf /workdir/torizon-docker-verdin-imx8mm-Tezi_7.6.1+build.38.tar -C /storage/tmpfdg45xi8
2026-06-22 10:35:18,225 - torizon.tcbuilder.backend.images - INFO - Unpacking TorizonCore Toradex Easy Installer image.
2026-06-22 10:35:18,225 - torizon.tcbuilder.backend.images - DEBUG - Running tar command: tar --xattrs '--xattrs-include=*' -xhf /storage/tezi/torizon-docker-verdin-imx8mm.ota.tar.zst -C /storage/sysroot --use-compress-program 'zstd -dc'
2026-06-22 10:35:20,228 - torizon.tcbuilder.backend.images - INFO - Importing OSTree revision aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296 from local repository...
2026-06-22 10:35:20,229 - torizon.tcbuilder.backend.ostree - DEBUG - Pulling from local repository /storage/sysroot/ostree/repo commit checksum aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296
1305 metadata, 9898 content objects imported; 671.9 MB content written
2026-06-22 10:35:22,631 - torizon.tcbuilder.backend.ostree - DEBUG - Pulling from local repository /storage/sysroot/ostree/repo commit checksum aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296
0 metadata, 0 content objects imported; 0 bytes content written
2026-06-22 10:35:22,664 - torizon.tcbuilder.backend.images - INFO - Unpacked OSTree from Toradex Easy Installer image:
2026-06-22 10:35:22,664 - torizon.tcbuilder.backend.images - INFO - Commit checksum: aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296
2026-06-22 10:35:22,664 - torizon.tcbuilder.backend.images - INFO - TorizonCore Version: 7.6.1+build.38
2026-06-22 10:35:22,664 - torizon.tcbuilder.cli.build - INFO -
=>> Handling customization section
2026-06-22 10:35:22,664 - torizon.tcbuilder.cli.build - INFO -
=> Handling device-tree subsection
2026-06-22 10:35:22,664 - torizon.tcbuilder.cli.build - INFO -
=> Selecting custom device-tree 'linux/arch/arm64/boot/dts/freescale/imx8mm-verdin-nonwifi-mallow.dts'
2026-06-22 10:35:22,666 - torizon.tcbuilder.backend.kernel - DEBUG - Kernel found at '/storage/sysroot/ostree/deploy/torizon/deploy/aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296.0/usr/lib/modules/6.6.138-7.6.1/vmlinuz'
2026-06-22 10:35:22,666 - torizon.tcbuilder.cli.dt - DEBUG - dt_apply: kernel_is_fit=False
2026-06-22 10:35:22,666 - torizon.tcbuilder.cli.dt - DEBUG - dt_apply: include directories: linux/include,device-trees/overlays
2026-06-22 10:35:22,674 - torizon.tcbuilder.backend.dt - INFO - Compiling Device Tree with DTC 1.6.0...
2026-06-22 10:35:22,693 - torizon.tcbuilder.backend.dt - DEBUG - OUTPUT FROM DEVICE TREE COMPILER
2026-06-22 10:35:22,693 - torizon.tcbuilder.backend.dt - DEBUG - linux/arch/arm64/boot/dts/freescale/imx8mm.dtsi:1245.12-1250.7: Warning (unit_address_vs_reg): /soc@0/bus@32c00000/mipi_dsi@32e10000/port@0: node has a unit name, but no reg property
linux/arch/arm64/boot/dts/freescale/imx8mm.dtsi:1227.32-1251.6: Warning (avoid_unnecessary_addr_size): /soc@0/bus@32c00000/mipi_dsi@32e10000: unnecessary #address-cells/#size-cells without "ranges" or child "reg" property
linux/arch/arm64/boot/dts/freescale/imx8mm.dtsi:1391.24-1424.5: Warning (unique_unit_address): /soc@0/pcie@33800000: duplicate unit-address (also used in node /soc@0/pcie-ep@33800000)
also defined at linux/arch/arm64/boot/dts/freescale/imx8mm-verdin.dtsi:647.8-657.3
also defined at linux/arch/arm64/boot/dts/freescale/imx8mm-verdin-mallow.dtsi:102.8-104.3
linux/arch/arm64/boot/dts/freescale/imx8mm.dtsi:675.34-680.6: Warning (unique_unit_address): /soc@0/bus@30000000/caam-snvs@30370000: duplicate unit-address (also used in node /soc@0/bus@30000000/snvs@30370000)
2026-06-22 10:35:22,693 - torizon.tcbuilder.backend.dt - DEBUG - END OF DEVICE TREE COMPILER OUTPUT
2026-06-22 10:35:22,693 - torizon.tcbuilder.backend.dt - INFO - File 'imx8mm-verdin-nonwifi-mallow.dts' compiles successfully.
2026-06-22 10:35:22,719 - torizon.tcbuilder.backend.dt - DEBUG - Found uEnv.txt in deployment: '/storage/sysroot/ostree/deploy/torizon/deploy/aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296.0/usr/lib/ostree-boot/uEnv.txt'
2026-06-22 10:35:22,719 - torizon.tcbuilder.cli.dt - INFO - warning: removing currently applied device tree overlays.
2026-06-22 10:35:22,719 - torizon.tcbuilder.backend.dto - DEBUG - Setting overlay list in 'overlays.txt' to []
2026-06-22 10:35:22,732 - torizon.tcbuilder.cli.dt - INFO - Device tree imx8mm-verdin-nonwifi-mallow.dtb successfully applied.
2026-06-22 10:35:22,733 - torizon.tcbuilder.backend.dt - DEBUG - Found uEnv.txt in changes dir: '/storage/dt/usr/lib/ostree-boot/uEnv.txt'
2026-06-22 10:35:22,736 - torizon.tcbuilder.cli.build - INFO -
=> Adding device-tree overlay 'device-trees/overlays/verdin-imx8mm_panel-cap-touch-15inch-dsi-bg_overlay.dts'
2026-06-22 10:35:22,737 - torizon.tcbuilder.backend.kernel - DEBUG - Kernel found at '/storage/sysroot/ostree/deploy/torizon/deploy/aca3a0e280280db43070c06fa7b9c520f8510d475480e09447972d917a367296.0/usr/lib/modules/6.6.138-7.6.1/vmlinuz'
2026-06-22 10:35:22,737 - torizon.tcbuilder.cli.dto - DEBUG - dto_apply: kernel_is_fit=False
2026-06-22 10:35:22,749 - torizon.tcbuilder.backend.dto - DEBUG - Found overlays.txt in changes dir: '/storage/dt/usr/lib/modules/6.6.138-7.6.1/dtb/overlays.txt'
2026-06-22 10:35:22,757 - torizon.tcbuilder.backend.dt - INFO - Compiling Device Tree with DTC 1.6.0...
2026-06-22 10:35:22,764 - torizon.tcbuilder.backend.dt - DEBUG - OUTPUT FROM DEVICE TREE COMPILER
2026-06-22 10:35:22,764 - torizon.tcbuilder.backend.dt - DEBUG - device-trees/overlays/verdin-imx8mm_panel-cap-touch-15inch-dsi-bg_overlay.dts:128.9-133.4: Warning (unit_address_vs_reg): /fragment@4/__overlay__/port@1: node has a unit name, but no reg property
device-trees/overlays/verdin-imx8mm_panel-cap-touch-15inch-dsi-bg_overlay.dts:123.11-134.3: Warning (avoid_unnecessary_addr_size): /fragment@4/__overlay__: unnecessary #address-cells/#size-cells without "ranges" or child "reg" property
2026-06-22 10:35:22,764 - torizon.tcbuilder.backend.dt - DEBUG - END OF DEVICE TREE COMPILER OUTPUT
2026-06-22 10:35:22,764 - torizon.tcbuilder.backend.dt - INFO - File 'verdin-imx8mm_panel-cap-touch-15inch-dsi-bg_overlay.dts' compiles successfully.
2026-06-22 10:35:22,764 - torizon.tcbuilder.cli.dto - DEBUG - No base DTB specified; picking the currently applied one.
2026-06-22 10:35:22,765 - torizon.tcbuilder.backend.dt - DEBUG - Found uEnv.txt in changes dir: '/storage/dt/usr/lib/ostree-boot/uEnv.txt'
2026-06-22 10:35:22,785 - torizon.tcbuilder.backend.dto - ERROR -
Failed to apply '/tmp/tmpgyyfpzk3.dtbo': FDT_ERR_NOTFOUND
2026-06-22 10:35:22,785 - torizon.tcbuilder.backend.dto - ERROR - error: cannot apply device tree overlays ['tmpgyyfpzk3.dtbo'] against device tree imx8mm-verdin-nonwifi-mallow.dtb.
2026-06-22 10:35:22,785 - torizon.tcbuilder.cli.dto - ERROR - error: overlay 'device-trees/overlays/verdin-imx8mm_panel-cap-touch-15inch-dsi-bg_overlay.dts' is not applicable.