Yup, you do what makes sense for you--then adjust for what works. But you can draw on the experience of others, and they on yours, just so none of us have to reinvent the wheel each time.
I've never had to provide a title--real, fake, photocopied or in any other form--at any border in Central America. But FWIW I met an aduana official at the El Salvador/Honduras border who had a looseleaf book with samples of titles from all 50 states, including detailed illustrations and descriptions of all security features--microprinting, iridescent ribbons, watermarks, holograms, you name it. You can't duplicate any of that on a color photocopy, and if you know what to look for the copies are blindingly obvious.
That's why I say aduana personnel are lazy: mostly they don't want to go to a lot of trouble, but if they decide to get tough and you can't provide a genuine document, you're sunk (at least to the extent of negotiating, then paying, mordidas in the hot sun when you'd rather be riding briskly down the road). And I figure each time I pay over the odds I'm setting up the next rider for more hassle, more negotiations, more frustration. It's not just a question of what I'm willing to pay.
My bike titles are painted with map seal so they never rip, stain, decompose or even wrinkle. Amazing stuff. I carry them, as I said, with my passport. I haven't lost either one yet, and I don't intend to start now. Why would I keep a title in my jacket? Why would you? That's where I keep the fakes and the color photocopies.