I'm making some overlays for Racemenu, so most of the texture is alpha=100% (transparent). even tho there may only be about 5% usage of the surface, I know that the entire texture will be computed for all passes.

So the question is this:

Since so much of the txtr is unused, will there be a performance difference between a 4k texture with 100% usage (like a bodymesh skin) and a 4k texture with 5% usage? In other words, will all those unused pixels be somehow optimized before being passed on to the renderer? Or is the entire 4k texture being displayed as is without any kind of optimization or management?

If it were a txtr with 100% coverage, a 2k txtr would perform better than 4k. But if there's any kind of optimization, a 4k txtr would look better and may still perform well. (prob even better than a 2k txtr with 100% usage)

I would say it will load it completely, since alpha channel does not reduce the size of textures, hence it would still occupy the VRAM with its size.

I am no expert, so someone might have a better idea.

This is true for memory usage, for sure, but as these pixels are not actually drawn ingame I don't know if there would be any difference in performance compared to a texture with more non-transparent pixels. But as there are hundreds of textures and models are loaded at all times, anyway, I doubt that there would be any noticeable difference. So I would say if you use mainly 2k and 1k textures for all other things, a single 4k texture (or a few more) shouldn't hurt much. What exactly is it that you want to do?