Based off of a saleforce ticket, it seems that reinitializing a niagara system with an updated texture, the texture does not update. The setup works correctly in 4.25, so marking as a regression.
Result: The particles still spawn in regards to the default texture
Expected Result: Particles should spawn according to the texture set in Begin Play
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-106109 in the post.