Variable Overflow refers to a situation where a variable wraps around from it's maximum value to it's minimum value or the other way around. While this is (inherently) not a bug, it can cause issues to games that do not factor this when manipulating variable data.As a point of reference:
Hex
Numeric Value Ranged - Unsigned
Numeric Value Range - Signed
Byte
0x00
0 -> 255
-128 -> 127
Integer
0x0000
0 -> 65535
-32768 -> 32767
Bytes refer to a single 8-bit value. Integer is a common term used to described a 2-byte value.
Signed bytes shift the range into the minus range by half of it's full range.
AGI variables are unsigned bytes and Sierra SCI0 games use signed integers. Sometimes, the negative values in SCI0 variables can have implications for games.