The MT2 local and remote locator and SID resolution and programming into RTM, FIB, and TTM follow the same rules as those for enabling SRv6 in the single topology (MT0).
If a remote IPv6 prefix route is received in both MT0 and MT2, the route with the lowest cost (IGP metric) is selected. If both routes have the same metric, the MT0 route is selected. The selected route is programmed in the RTM and FIB. If that prefix also advertised a locator TLV, the corresponding SRv6 route is updated in the RTM and FIB to point to the SRv6 tunnel which is programmed in TTM.
The preference of MT0 route over MT2 route is solely based on comparing the cost of each route. So, a remote IPv6 prefix route without a locator TLV can win over a remote IPv6 route with a locator TLV. The programmed route in the RTM is a regular IS-IS route and does not have an SRv6 tunnel associated with it.
The same selection rule applies to a locator TLV advertised with a flex-algo number in both MT0 and MT2. The selection is based on comparing the cost of the routes using the metric of that specific algorithm (IGP, TE, or latency metric). The selected SRv6 route is added to the RTM and FIB and points to the SRv6 tunnel which is programmed in TTM.