Unfortunately your existing mountains will shrink. But you may export the heigth map and do a little Photoshop job (increase contrast to max and blur a bit) and reimport it to gain heigth again. But that will be not exact I think.
The Photoshop file is only a starting point to create some own baked decal-road materials. It makes no sense to put this in your map (mod?) folder. This is not an asset. The simplest (but not the best) way to bring it ingame is to derive a png with alpha channel from this. Put this in your art/road folder in you map, create a new material in the main.materials.json there and use the png in the material. The reason why I provided a Photoshop document is that you can easily alter the single elements of the road marking since they are on different layers. It is a bit advanced. If you like to have some ready to use road markings, you can use some from vanilla maps and import them with AlexKidd71's great tool.