* lisp/vc/smerge-mode.el (smerge--refine-set-overlay-props):
New function, extracted from `smerge--refine-prepare-regions`.
(smerge--refine-prepare-regions): Take overlays rather than beg/end
arguments and remove all overlay property manipulation.
(smerge-refine-regions): Create the overlays and pass them to those
two functions.