The only security feature in BPS Pro that would have anything to do with file permissions for a DSO Server Type would be F-Lock. DSO server file permissions should always be 644 and you should not try to change them to any other file permissions besides 644 file permissions. If you are manually modifying or uploading files to your website with FTP then yes you should turn off AutoRestore so that your files are not quarantined as hacker files. See this link for additional help info and procedural steps when manually modifying/uploading files: http://forum.ait-pro.com/forums/topic/autorestore-quarantine-guide-read-me-first/#procedural-steps Other than these 2 things, BPS Pro does not do anything else related to FTP.
Most likely the problem is this: Check the current Owner of the files on your website and the Owner of the FTP user account you are using. If the Owner of the FTP user account you are using is different than the Owner of the files on your website then you will not be allowed to overwrite the existing website files since you would have to be using an FTP account that has/is the same Owner of your website files.