I placed one overlay on 2 brush faces and/or over 2 separate brushes at an angle between 0 and 90 degrees. The result is the same, the overlay being split in two with a very noticeable transparent line. What is even stranger, this only happens in-engine but in Hammer the overlay is continuous. I annexed screenshots, in this example the angle is at 90 degrees but as I said it would be the same with any angle, like 30 for instance.
Someone else created a post illustrating the same exact issues as you, with textures not remaining seamless across surfaces. All information I've been able to gather shows that this is simply a shortcoming of source. When I decompiled Valve maps I saw they dealt with this by slightly scaling up the textures and shifting the justification in slightly. You're basically clipping off the edges of the textures, which means the textures won't be perfectly seamless. However, most people won't really notice, especially considering the age of the engine.
Well, I know about the tiling problem, however in my case it's an overlay and it's not tiled at all. It's one big texture applied over 2 sides of one brush, at an angle. So the line you see is in the middle of the graffiti overlay, not the bricks. The bricks are fine.
Yeah but overlays are useful for other things as well, not just graffiti. Try beveling that edge, it might be some calculation problem due to a sharp angle.
wait, that's one overlay applied to two faces that are at 90 degrees from each other? Have you tried making that two separate overlays and aligning them? I would imagine overlays start to do weird things when the applied faces have wildly different facing angles.