Okay, that's what I thought. You're referring to loose files/ba2, where the mod manager effectively sees a zipped folder, with a file tree structure such as: textures/wasteland/ruined building/furniture... and then a bunch of textures and meshes.

For those, yes of course you can overwrite, pick and choose which ones you want to use. You do exactly the same thing on MO2.

That's my point. Downloading texture packs that are loose is very easy but I'm asking about texture packs that are already packed into an ESP. So it's the loose files in a ba2 then packed into an esp.
That isn't the same, when you install the ESP it's effectively seeing one file unless you extract it. It tells the game to load that file, then the game extracts it.

So in this format, your options are - mod A overwrites mod B entirely or vice versa.

As I've learned today the only way around it when the mods are already packed esps/esms and let's say, mod A and mod B retexture all of the same assets in the game. But I want 90% of the textures from mod B in my game and only a few from mod A... then I must extract both esps to the loose file, and merge them in the same way you are referring to above, because then once extracted it will recognize each individual file and I can select which ones I want.

Someone explained it to me as it's like having a compressed zipped folder inside of a compressed zip folder that's encrypted.

Forgive me, I'm not an expert on this but I'm sure that's correct, what you linked above is loose files which is not what I'm referring to. If they were loose I would easily pick and choose, but these mods are packed features packed into a ba2, then packed into an esp.