I have had this issue several times because I use several apps that have issues being used both as a screen overlay and for various other things at the same time, so my G4 will ask me to turn off the overlay settings so it can do whatever task it wants to do without the overlay. To change this (on or off) the correct way is to go to Settings> General Tab> Apps> Select Settings Icon (it's the three dots at the top, right hand corner of the screen)> Draw Over Other Apps> Then you can go through and either turn everything on, off or only turn on select apps. If your phone notifies you that there's a problem, it will usually give you the option to go straight to the Screen Overlay menu so you don't have to navigate yourself all the way there. But this is how you get to it if that isn't an option for whatever reason.
The G4 hasn't always had this feature and I personally hate it and it makes me really dislike my phone. I've been using LG smartphones for years because I love the multitasking capabilities and as a photographer, I especially enjoy the camera, but the screen overlay settings really ruin it and I'm even considering changing phones because it's such a frequent issue and I need to use the overlay with a couple of apps that I rely on heavily, so that one feature has really changed how I feel about my phone in a negative way. (Just thought I'd throw that out there in case anyone from LG sees this).