Hi Jerry,
I think that’s what it’s called. As I remember, there are three different types of ‘overwrite’ in FCP.
‘regular’ overwrite, overwrite clip with transition, and overwrite sequence content. The last one allows you to edit using another sequence as a source without FCP automatically creating a nested track in the sequence.
I almost always use this as I often do projects that involve select sequences as sources or multiple post-sync audio tracks and being able to see the individual original clips clearly in the timeline is critical.
I remember seeing this behavior before, but I feel like it’s the result of a misplaced setting that I just can’t find.