If the overlap was created to leeward from clear astern, leeward can sail its proper course.

The other aspect about this is that a boat clear ahead isn't allowed to sail below its proper course. Can't remember those rules clearly though. There's something about boat lengths from astern/leeward boats.

If the clear ahead boat was sailing so far below its proper course that the leeward boat had to round up significantly once an overlap was obtained, it sounds like ahead boat may've been breaking this rule.