Can I model technical replicates in DESeq2?
Practically speaking, there's no way to include the technical replicates in that design (in DESeq2 at least). Your concern regarding inflating the power is exactly correct and the only way to combat that would be to add a pairing factor like one might do with case-control or tumor-normal studies. That is, something like:

  group libraryPrep sample
1    WT           A      1
2    WT           B      1
3   MUT           A      2
4   MUT           B      2
5    WT           A      3
6    WT           B      3
7   MUT           A      4
8   MUT           B      4


Here sample pairs the technical replicates together. However this ends up either being rank deficient or in the end not more informative.