The original post doesn’t state when the overlap was established. My interpretation is blue got a leeward overlap well before entering the zone. Once blue gets an overlap, the onus is on orange (now the windward boat) to keep clear. Blue is limited in how far she can turn up in that she can’t sail above her proper course, but proper course is a pretty broad term. Obviously she can’t luff orange head to wind, but she can almost certainly push orange above the zone, meaning mark room doesn’t apply and blue can sail until she can jibe to the mark on a hot reach. Orange will be forced to follow. That’s why I’m saying that once blue establishes the overlap to leeward on starboard tack, it’s pretty much game over for orange.
Even if blue does drop into the zone and orange calls for room, blue just has to give her space to round the mark. Blue can do a quick jibe to port at the finish and will blanket orange. Blue still wins.
That’s my experience with these situatuons. You never want to allow a situation to occur where someone on starboard establishes an overlap to leeward of you and prevents you from jibing when you need. Either foot down to their line (even if it means going slower), jibe out early and cross them, or heat it up to maintain separation so you can jibe when you need to.