If this is your first upgrade your in for a nice ride. Trying to transfer guts is not the way to go and if the donor engine had the boards in the engine, you won't have properly wired harness for what you are doing.
Those diodes are a way to get away with 10 wire harness when 11 wires are needed. The smoke element and the lights need Positive Voltage (PV) to operate. One way to generate it if you do not have a dedicated wire to carry it, is to use the motor leads to generate it. One of the motor leads always has PV on it. Yel for forward and wht when in reverse. SO those diodes ensure that a Positive voltage is available for the purple wire regardless of motor direction. Mounting to a PCB is convenient, but some engines have them wired off the motor. You can do that too.
Are you sure your smoke unit is a match, sometimes funnels are different so you modify the original. If it the same then swap is easier.
You really would have been better off with a PS-32 steam upgrade kit. G
