what does sequences overlap indicate
Expanding on the comment by @Chris:

Short Answer

Overlapping sequences imply evolutionarily conserved regions, i.e. preserved by evolution through time due to theirs having some important function.

Long Answer

Assuming the sequences are homologous, overlapping regions of similarity reveal "evolutionarily conserved regions".

These are regions in the protein sequence that are shared by the ancestors through ancestral history due to that shared sequence bearing some important function at the phenotypic level. Evolution acts to "preserve" the sequence through natural selection if that function was important for fitness (see Negative selection).

E.g. Perhaps the shared sequence codes for an active site for an enzyme that is shared by all the ancestors you are using in the multiple sequence alignment - natural selection will then prevent changes to that sequence from occurring.

Look at this online lecture for finer detail.