What problem does this address?

The order of the settings Navigation Block in the block inserter might make users believe that the "Open on click" option under "Submenus" affect the Overlay Menu, because it is placed directly after it, when, in fact, it doesn't apply to the Overlay Menu at all:

What is your proposed solution?

Some ideas:

• Adjust the copy of the Submenus setting to indicate it doesn't apply to the overlay menu
• Reposition the sections in the UI to make a clearer separation between those two settings
• Make "Open on click" work in the Overlay Menu