When all of the girls are going ga-ga over a cute football player that you don't think is THAT hot or THAT cool you might say, "Wow, he's overrated!"
If someone gets a friend to tell a possible employee how amazing their friend is and that they should hire them immediately...and then the friend shows up at the interview and totally blows it then the employer might think, "That person is way overrated."
A "touch" overrated would mean "just a little" overrated. This might mean something like:
That football player IS cute but he isn't THAT cute. You can understand why a few girls would be really into him but cannot understand why ALL of the girls are.
He's a touch overrated. He's a touch liked-too-well-for-little-to-no-reason.
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