You roughen up all the leather but most of the sanding is of the FlexFill areas. You want some 'tooth' for the dye. If your perforated leather inserts are damaged, they s/b replaced.
There is a (minimal) loss of texture on the solid leather if you do not overdo the Flexfill - the original leather on the earlier W126 cars is pretty smooth. Later cars have more textured leather and I cannot comment, not having done one.
As with all things, a little is better than too much.
The Surflex dye/paint is water based - note what I write about getting rid of any brush marks.
Bottom line - which would you rather have - ugly cracks or some minor fluctuations in textuure?