@vue/cli-overlay provides an interactive overlay for Vue CLI projects in development, surfacing compiler warnings, errors, and runtime exceptions directly within the browser. This enhances the developer experience by providing immediate feedback on code issues, streamlining debugging and preventing silent failures. By displaying detailed error information in a visually clear format, it simplifies identifying the root cause of problems, leading to faster development cycles. It's a crucial tool for quickly identifying and resolving issues during Vue development.