Right now when the Overlay widget gets passed loose (but not infinite) constraints, it picks constraints.biggest as its size. In order for Overlay to work for views sized to content, a behavior was added where the Overlay can a child to size itself. This however only works, when constraints are infinite.

There is a missing gap here where we need Overlay to size itself to content, but in constrained but loose environment. The usecase for this is Popover window, where the size of the popover is determined by content, but there are incoming constraints from the desktop (popover can not be larger than usable desktop area)/