When I bake a normal map (or AO) on a uv set that has no overlapping polys (Like I'm supposed to right?), how can i use overlapping uv's for higher res in the diffuse map?
I can't simply apply normal map to uv set 2 and diffuse to uv set 1 in UE4
>I can't simply apply normal map to uv set 2 and diffuse to uv set 1 in UE4
Yes you can. But it's going to mean adding an extra draw-call, but not a huge issue so long as you're not using two UV sets on objects that are going to be duplicated hundreds of times.
The better question is, why are you overlapping the diffuse UVs, but not the normal? You can do overlap with normal maps, you just can't BAKE while they are overlapping (well, actually, Maya TransferMaps can do this for you if it's a mirrored overlap). But usually, people just bake with the mirrored faces scaled down to some tiny point on the UV map, then after the bake is done, undo that change so the faces are both using the same normal bake island.