LTI is not yet a full replacement for MNET. It doesn't work as an IDP. Because of this there's no point in converting MNET users to LTI users yet. And as such there's no feature to do it in moodle.
You are correct LTI would create new accounts. To stop this, the auth type of all the MNET users on Moodle Remote could be changed to LTI and the username of each account set to create_username($consumerkey, $ltiuserid) from \enrol_lti\helper
Using the consumer key of Moodle IDP. And $ltiuserid being the id of the user account on Moodle IDP.
But again, I'm saying all this to say - this is too complicated I don't think LTI is ready yet. We could create a admin tool to do this, but there's no point IMO until LTI works as a proper IDP.
In some cases LTI works better than MNET (when access to certain courses is all that's needed, with no continuity of users required etc). By the sounds of it, your use case (SSO) is one that is still better done in MNET.
CAS is always another option for SSO