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https://www.youtube.com/watch?v=nzHAbeJoDY4
Occurs in all games that I've tried. Immediately after shift-tabbing to bring up overlay, it is hidden behind the Steam Recording menu. The "quick" buttons are not visible below for me, but they can be clicked and activated, which does bring up the appropriate overlay window (eg, clock -> opens the clock)
https://imgur.com/a/YtWIivm
I turned this feature ON in overlay menu, overlay is visible and interactable for a second, before Recording is overlaying the overlay
https://youtu.be/342Uzs2tYEw
Not sure if you're still having the issue still but apparently if you previously used a Steam skin for your client it can cause issues with the overlay with the new update. I deleted the 'skins' folder from my Steam install and restarted Steam and that seemed to fix the issue for me.
Omg, that really worked. Thank you