überzogen
excessive
Exaggerated or unreasonably strong; more than necessary or appropriate.
Seine Reaktion auf den kleinen Fehler war völlig überzogen.
His reaction to the small mistake was completely excessive.

excessive / coated / overdrawn
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excessive
Exaggerated or unreasonably strong; more than necessary or appropriate.
Seine Reaktion auf den kleinen Fehler war völlig überzogen.
His reaction to the small mistake was completely excessive.

'Überzogen' (excessive / coated / overdrawn) is the past participle of the verb 'überziehen' (to overdraw; to coat; to exaggerate). The different meanings of the adjective derive directly from the meanings of the verb: ein Konto überziehen (to overdraw an account), etwas mit Schokolade überziehen (to coat something with chocolate), or eine Kritik überziehen (to make criticism excessive).
Er neigt dazu, seine Geschichten stark zu überziehen.
He tends to exaggerate his stories a lot.
You can recognize which meaning is intended from the noun: If it refers to a 'Konto' (account), it means 'in the negative/overdrawn'. If it refers to abstract things like 'Preise' (prices) or 'Kritik' (criticism), it means 'exaggerated/excessive'. If it is used with 'mit' (with) and a material, it means 'covered/coated'.
Die Preise in diesem Restaurant sind völlig überzogen.
The prices in this restaurant are completely excessive.
In the meaning 'übertrieben' (exaggerated/excessive), the word is often combined with abstract nouns. Common examples are: überzogene Preise (excessive prices), überzogene Forderungen (excessive demands), or eine überzogene Kritik (excessive criticism).
Seine Forderung nach einer Gehaltserhöhung um 50% war überzogen.
His demand for a 50% salary increase was excessive.
When 'überzogen' means 'bedeckt' (covered/coated), it is almost always used with the preposition 'mit' (with) and the material of the coating. The structure is: mit etwas überzogen sein (to be coated/covered with something).
Die alten Möbel waren mit einer dicken Staubschicht überzogen.
The old furniture was covered with a thick layer of dust.
This meaning is specific to the financial context and is used only in connection with 'das Konto' (the account). You can indicate the amount with the preposition 'um' (by).
Mein Konto ist am Ende des Monats oft um etwa 50 Euro überzogen.
My account is often overdrawn by about 50 euros at the end of the month.
appropriate
'angemessen' and 'überzogen' both describe whether something matches the right measure. 'angemessen' says that something fits the situation and is neither too much nor too little. This can refer to behavior, a price, or a reaction. 'überzogen' is the opposite: something is too strong, too high, or exaggerated. Especially with criticism, demands, or reactions, 'überzogen' sounds natural when someone does or asks for more than would be appropriate.

Die Kritik des Chefs war nach dem kleinen Fehler völlig überzogen.
The boss's criticism was completely excessive after the small mistake.
Nach dem Gespräch fand Selma die Entschuldigung angemessen.
After the conversation, Selma found the apology appropriate.