I was wondering how to use overlays so it draws on top of a "GUI"? I've tested it and so far the overlay does not draw on top of a "GUI", just onto the background.
Unfortunately you can't draw an Overlay on-top of a GUI, but you could just use another GUI with a higher z-order.
Also to be clear, Overlays are drawn on-top of the entire scene (background, characters, and objects) but behind GUIs which are drawn on-top of everything but the mouse cursor.
Oh, and if you needed to use a textual overlay, then just consider using a Label control on the GUI; or for a graphical overlay, just set the GUI.BackgroundGraphic.