If you drag a Motion onto the timeline, and it's long enough to overlap an existing Motion to the right of it, iClone simply deletes the Motion that it overlaps with. It should instead automatically fade between the two motion, exactly the same as if you had dragged the motion into an empty region, and then slid it over to overlap the animation.

See attached screenshots. Screenshot "A" shows a Walk motion in the timeline. Screenshot B shows what happens when I drag a Breath motion just to the left of the existing motion. (The Walk motion got deleted because there was some overlap.). Screenshot C shows what the "correct" approach should be, where the two clips are blended.