No, it does not overwrite your firmware.
A fir file consists of 3 parts: A header, the flasher and the actual firmware (encrypted). The complete fir file is loaded at 0x800000 (RAM). Then the camera checks its header, whether it is the right file. After that it jumps to 0x800120. There the flasher code begins. The flasher itself is responsible for overwriting the flash. assemble_fw will exchange the flasher with our own code and it will zero out the rest of the file. So there is no chance of "blowing its brains out"
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The problem is that many of the addresses and data are hardcoded into the firmware. As the fir file is partly encrypted, you cannot easily make changes there. You'd have to reencrypt it. But I don't know how
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IDA 4.9 is probably ok, although I'm using 5.5.
