No, the mortgage interest deduction limits are not applied separately to each loan. If all of the debt is acquisition debt and the average of mortgage A (pre-2017) is $400,000 and the the average of mortgage B (post-2017) is $966,000, the limit on the combined mortgages is $750,000. So the percentage of your deductible interest is $750,000/($400K + $966K) = 54.9% of $27,000 = $14,823.
It appears that your example is selling a home and paying off the old mortgage and buying a new home with a new mortgage. This situation sucks the most for mortgage interest deductions. For 2023, you have two separate loans limited to 54.9%. Next year you will one loan limited to 93.8% ($750,000/$800,000) = 93.8%.
Turbo Tax uses the beginning and ending balance method to calculate the average balances. This is one of the averaging methods in pub 936 but generally yields a slightly less deduction. In the past they just used the ending balances without averaging at all and not rounding the result to three decimal places to figure the percentage. This method is no where to be seen in pub 936 but generally yields higher deductions. The averaging method you used is the statement balance method on page 12 of pub 936.
