What you're talking about is not "overtraining" as its defined.
You're talking about excessive training - just not giving the muscle time to recover. Training the same muscles, especially anywhere close to failure of any type, is going to be counterproductive.
You grow OUTSIDE the gym. Its the recovery period that rebuilds the muscle, not the training. Think of it this way, if you want to grow a nice, full beard, you dont shave it every day... You let it grow, trim a little, grow a little, trim a little, etc... eventually its long, full, and well groomed, vs the guy who just keeps trying to shave it into that perfect shape and never lets it fill out.
Overtraining is a CNS issue and yes, its real. However, its nearly impossible for any layman to achieve as it takes some seriously rigorous training (Im talking competition level, not the "bro, I go HAM at the gym" level) as well as diet/sleep and other factors.