I believe overlap uses the same sweep to detect as a hit would a fast moving physics object will pass through and object.
Think of the frames the moving not object is going at. If it isn’t a constant detection it might not detect a overlap or collision.
For instances
Bullet is moving 10 units per frame.
You are standing 11 units away.
It checks first frame not overlapping
Then again at 20 units not overlapping
No collision detected. It essentially passes through the object.
If bullets are moving at such a high rate you may want to use a line trace for the hit detection and use the actual physics object for visual only. Or try ccd just know for the life of that object it is basically guaranteeing to check for collision constantly which is more taxing.