Overlay is when certain environmental conditions persist (like high humidity) and the mycelium's response is to maintain the mycelial growth and not to commence fruiting.This occurs when cakes or casing has been put in a fruiting chamber and continues to produce more and more mycelium (overlay... myclelium grows on top of mycelium).
Since fruits (mushrooms) are desired, conditions much change to indicate to the mushrooms this change. Depending on the conditions, what change should occur is usually apparent.
Overlay is usually due to too high a humidity during the fruiting stage, and can be corrected by more frequent airations, or a change to the humidity supply (change from perlite to a humidifier, or air, or no addition humidification).