Actions will run when all the conditions in the event block are true (if it's an AND event). << This is the most important part of this.
You only have 1 condition in your block checking every tick
Is overlaping is a condition, it will return true when the condition is met.
So it does a collision check whenever you tell it to do it (every tick in your case).
If it's overlapping every tick then the event will run the actions (because this is the only condition).
If it's not overlapping it will keep checking of course and returning false so the event will not run the actions (conditions are not met).
Is overlapping can't specify "every tick" in the description, that's only true in your case not in all cases.
It can't say "will run actions" because conditions don't run actions, the event run actions when all conditions in the block are true.
I understand that it's frustrating and the grenade example is funny, but the description is not an instruction, the grenade description should say something like "exploding device" and you choose how to make it explode. Just keep in mind that the conditions are not a single use scenario. They can't define 1 use in the description when it can be used in potentially a hundred different ways.