'Is overlapping at offset' moves the object temporarily 'offset' amount of pixels and checks the overlap, and then moves it back.
With an offset x=20,y=-30, it moves the object (from its current position) 20 pixels on the x and -30 pixels on the y, checks for overlap (picks the objects) , and moves it back to current position.
So, important to understand, it is not checking for collision at that one point in space. It checks the whole collision polygon's of one object against another object.
If you want the offset to be an imagepoint.... then
offset on x = sprite.ImagePointX(n) - sprite.X
offset on y = sprite.ImagePointY(n) - sprite.Y
I you want to check for an overlap at a certain point in space, you have the system condition Pick overlapping point.