We can create overlay over overlay, Mean A-> b->C, but B artboard will get remove. Thats the limitation of XD. I would suggest try using component state and apply overlay on component state.
Means, create compoment -> add another state using hover -> wire from hover to another artboard.
I hope this will help.
Thanks for trying the step suggested by Vertika. We will definitely share your feedback with the team to make improvements in future. Please feel free to reach out to us in the future for any query related to XD.
We would be happy to help.
Thank you, Vertika for providing the workaround to the problem.