To get rid of these overlapping polygons, we can use the v.clean tool. Search for v.clean in the Processing Toolbox | Cleaning tool option and set to rmarea (meaning remove area), which is also available through the Processing Toolbox. In the example shown in this screenshot, the Threshold (comma separated for each tool) [optional] value of 10000 tells the tool to remove all polygons with an area less than 10,000 square meters by merging them with the neighboring polygon with the longest common boundary:
Check the size of your overlap area and adjust this value accordingly. Click ...