This bug was pointed out by GSoC student working on JSON_INTERSECT().
JSON_OVERLAPS() does not check entire value for nested keys.

SET @json1 = '{"kk":{"k1":"v1","k2":"v2"}}';
SET @json2 = '{"kk":{"k1":"v1","k2":"v2","k3":"v3"}}';
Example:
SELECT JSON_OVERLAPS(@json2, @json1);
JSON_OVERLAPS(@json2, @json1)
1

vs

SELECT JSON_OVERLAPS(@json1, @json2);
JSON_OVERLAPS(@json1, @json2)
0

Both should give 0