what's wrong when you see this

select apps to allow their buttons, pop-ups, or other elements to appear over other apps you are using

There isn’t necessarily anything wrong with it. What did you do to get the prompt?

There's a function that allows an app to put things over other apps' displays. That message is just asking you to give the app permission to do that. (Remember that you gave it - if an app complains about another app being over it, or about an overlay, the app doing it is the one you gave permission to. You might have to revoke it temporarily.)