Let us suppress the initial and final time, $t_i$ and $t_f$, respectively, from the notation, as they play (almost) no role here.
The full Feynman propagator on a circle $S^1\cong \mathbb{R}/\mathbb{Z}$ is a sum over winding modes$^1$ $n\in\mathbb{Z}$
$$ \tag{23.5}K(\varphi_f;\varphi_i)
~=~ \sum_{n\in\mathbb{Z}}A_n K_n(\varphi_f;\varphi_i), $$
where $K_n(\varphi_f;\varphi_i)=K_0(\Delta\varphi-2\pi n;0)$ is the Feynman propagator for a single winding/instanton sector $n\in\mathbb{Z}$. Here we have defined $\Delta\varphi~:=~\varphi_f-\varphi_i$. The idea is now that if we go around the circle $\varphi_f \to \varphi_f+2\pi$, then the physical result should be the same, i.e. the full Feynman propagator cannot change by more than a phase factor
$$ \tag{A} K(\varphi_f+2\pi;\varphi_i)~=~e^{i\delta}K(\varphi_f;\varphi_i), \qquad \delta\in \mathbb{R}, $$
while by definition the individual sectors get shifted
$$ \tag{B} K_n(\varphi_f+2\pi;\varphi_i)~=~K_{n-1}(\varphi_f;\varphi_i). $$
Thus, if the $K_n$'s are linearly independent, then eqs. (A-B) and (23.5) imply that
$$ \tag{23.6} A_{n+1}~=~e^{i\delta}A_n, $$
so that
$$ \tag{C} K(\varphi_f;\varphi_i)
~=~ A_0 \sum_{n\in\mathbb{Z}}e^{in\delta} K_n(\varphi_f;\varphi_i). $$
It remains to show that $A_0$ is just a phase factor, $|A_0|=1$.
OP is correct that the modulus $|A_0|$ can in principle be determined from the normalization condition
$$ \tag{D} \iint_{[0,2\pi]^2}\! \mathrm{d} \varphi_f ~\mathrm{d}\varphi_i ~|K(\varphi_f;\varphi_i)|^2~=~1,$$
see also e.g. this Phys.SE post.
Alternatively, if we assume that $A_0$ does not depend on time, then we can prove $|A_0|=1$ by going to the short time limit $|t_f-t_i|\to 0$. In that limit the classical action blows up, so that
$$ \frac{K(\varphi_f;\varphi_i)}{A_0\exp\left[\frac{i\delta}{2\pi}\Delta\varphi\right]}
~\stackrel{(C)}{=}~\sum_{n\in\mathbb{Z}}\exp\left[\frac{i\delta}{2\pi}(2\pi n-\Delta\varphi)\right] K_0(\Delta\varphi-2\pi n;0)$$
$$ ~\quad\longrightarrow\quad~
\sum_{n\in\mathbb{Z}} \exp\left[\frac{i\delta}{2\pi}(2\pi n-\Delta\varphi)\right] \delta(\Delta\varphi-2\pi n)
~=~\sum_{n\in\mathbb{Z}} \delta(\Delta\varphi-2\pi n)$$
$$ \tag{E}~=~ \delta(\Delta\varphi-2\pi \mathbb{Z})
~=~\frac{1}{2\pi}\sum_{m\in\mathbb{Z}} e^{im\Delta\varphi}~=:~III_{2\pi}(\Delta\varphi) \quad\text{for} \quad |t_f-t_i|~\to ~0, $$
where we have used the Poisson resummation formula that Trimok wrote in a comment above. See also the Dirac comb function. The rhs. limit of eq. (E) is the Dirac comb function $III_{2\pi}(\Delta\varphi)$, which is the correct limit for the full Feynman propagator $K$ on a circle geometry (up to a phase factor). So $|A_0|=1$.
The various phase factors appearing between different instanton/winding sectors in the path integral can in principle be accounted for by carefully tracing (i) the physical effects, such as, e.g. the Bohm-Aharonov effect, etc.; and (ii) phase factors implicit in the definition of eigenkets $|\varphi, t\rangle$ localized in angle space.
References:
- L.S. Schulman, Techniques and applications of path integration, 1981, chap. 23.
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$^1$ It is possible to deduce Schulman's sign convention for the winding mode $n$ from his eq. (23.8) for $K_n$. Incidentally, the explicitly form (23.8) is probably also the simplest and most convincing way to see that the $K_n$'s are indeed linearly independent.