That worked, but apparently they did overlap again. I dont know why this happens. I only have 2 sprites, one player one enemy. There are two instances of enemy and one player on my layout. player has 8direction behavior while enemy has only solid behavior. But they still overlap.
Then, I tried putting 8behavior on the enemy. Amazingly, they worked. I can control my player using WASD and the monster follows me and they dont overlap. Only problem now is how to make the arrow keys null when pressed so they wont move. Here's a sample capx.