I've just recently had to work through an issue where I needed to do an override to the pagination.php file. Any attempts to make changes and place it directly into the templates HTMl directory would break the website. Of course, information on why this was happening was pretty much non-existant at the Joomla forums.
The fix became apparent when I inspected (and tested) the pagination.php override that can be found in one of Joomla's pre-packaged templates protostar. Copying that override and placing it in my own templates HTML directory worked.