I cannot drag items into the Overflow Menu while customizing the toolbar. Dragging item into the Overflow Menu section from the toolbar just delete them with the 'puff' animation, while dragging item from the overlay just made them float back into the overlay, not into the Overflow Menu section.
I'm using Version 0.99.120.1-beta (WebKit 614.1.20) on MacBook Pro (macOS Ventura 13.0 build 22A380)