Debian's `unzip` utility, which is based off of Info-ZIP but with a number of patches, errors out on overlapping files, though not before making a 21 MB file named `0` - presumably the only non-overlapping file.
unzip zbsm.zip
Archive: zbsm.zip
inflating: 0
error: invalid zip file with overlapped components (possible zip bomb)
Yep, these kinds of format shenanigans are increasingly rejected for security reasons. Not zip bombs specifically, but to prevent parser mismatch vulnerabilities (i.e. two parser implementations decompressing the same zip file to different contents, without reporting an error).
I think these mitigations are misguided and I've had false-positives at least once. Rather than caring about structural details (overlapping files etc.), decompressors should just limit the overall decompression ratio by default (bytes in vs bytes out). It shouldn't matter how the ratio is achieved.