Yeah, overlapping seems counterintuitive when you first out, at least it did for me. But the bonuses of overlapping are pretty tangible. Off the top of my head you get: more cities that are equally productive in the same area(Up until sanitation, anyways), less corruption in more cities, more defensive movement, it takes less movement to go between cities, the AI are less able to squeeze in cities in culture cracks, and some more stuff.
I think I overlap a little heavily, as most of my cities max out at 13-16 spaces available to use. Though when I do find a spectacular city sight and I intend to go into the industrial and modern ages, I'll often give it the optimal 21 spaces just so it can become a shield-power house. This is especially important with 20k cities, I think.