Consider this simple example:
mytrans[expr_] :=
expr /. Ω1^2 + Δ^2 :> Ω^2
f =
FullSimplify[Sqrt[-Δ^2 - Ω1^2],
TransformationFunctions -> {Automatic, mytrans}, Assumptions -> #] &;
f /@ {{Δ > 0, Ω1 > 0, Ω > 0},
{Δ > 0, Ω1 < 0, Ω > 0},
{Δ < 0, Ω1 > 0, Ω > 0},
{Δ < 0, Ω1 < 0, Ω > 0},
{Δ ∈ Reals, Ω1 ∈ Reals, Ω > 0}}
(* {I Ω, I Ω, I Ω, I Ω, Sqrt[-Δ^2 - Ω1^2]} *)
Isn't the last assumption equivalent to the first four? Why doesn't it work? Or why does it work in the first four cases?