How to override code of module in custom module?
You can use  hook_field_attach_form(). function much like it has been done in content_taxonomy_autocomplete module and replace the validate function to the one you want.

function MODULENAME_field_attach_form($entity_type, $entity, &amp;$form, &amp;$form_state, $langcode) {
 // Add validation function to taxonomy_autocompletes, if necessary.
  $instances = field_info_instances($form['#entity_type'], $form['#bundle']);
  foreach ($instances as $instance) {
    if (($instance['widget']['type'] == 'taxonomy_autocomplete' || $instance['widget']['type'] == 'autocomplete_deluxe_taxonomy') 
      &amp;&amp; isset($form[$instance['field_name']]) 
      &amp;&amp; isset($instance['widget']['settings']['content_taxonomy_autocomplete_new_terms'])) {

      // Use the language that is used in this form (which doesn't necessarily
      // be the default language in $langcode).
      $lang_key = $form[$instance['field_name']]['#language'];
      if ($instance['widget']['settings']['content_taxonomy_autocomplete_new_terms'] == 'moderate') {
        $form[$instance['field_name']][$lang_key]['#element_validate'][] = 'content_taxonomy_autocomplete_validate_moderate_new_terms';
      }
      else if ($instance['widget']['settings']['content_taxonomy_autocomplete_new_terms'] == 'deny') {
        $form[$instance['field_name']][$lang_key]['#element_validate'][] = 'YOUR_NEW_VALIDATOR_NAME';
      }
    }
  }

}


// add your validater function here