The article that you are referring to is outdated and it concerns an old version of RadTreeView (this is why it is not accessible through the documentation navigation tree). The properties shown in this help article concern only the three states - normal, selected and expanded. All these are still achievable by making use of the NodeFormatting event. However, overlaying images was not and it is still not supported out of the box.
A possible approach is to set both the Image and BackgroundImage properties of the ImageElement of TreeNodeElement and then set the ImageOpacity to 0.5. This way the the image will be faded and the background image will be visible underneath. Please refer to the attached sample project. I hope that this will work for you.
Should you have any other questions, do not hesitate to contact us.
the Telerik team
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