Overpanelling, what is it about?

I am designing with a Sunny Tripower 20000TL-US. It has two MPPTs. from my calculations, each can take 75 280W Canadian solar CS6k-280P panels. Making a total of 42kWp PV array. If the nominal output is 20kW. Is there not some waste here? Also the tripower would be connected to a sunny island which has a battery bank. Would the batteries be charged by the excess power from the PV. What really is overpanelling? Can't find anything online.

Sunny Tripower 20000TL-US
Will output a max of 20,000W
So if you have two units it can output 40,000W= 2x20,000W
So an output of 40,000W with an input of 42,000W aka 5% extra.
I think most devices have a 5% tolerance, it's something that they wouldn't even mention, so just pretend it doesn't even exist.

That said you device can actually handle 25% extra .... aka 40,000W output with a 50,000W input. Now that is something to talk about.
So any input over 40,000W will just get wasted and dumped, going nowhere.
The good news is that solar panel only give their rated output at noon, the rest of the day it is outputing 75% or less. So in reality very little energy is actually wasted/dumped. Not only that but the rated output only happens under ideal conditions with zero dust, perfect temperate, airflow, humidity, and no cloud. That probably only happens a few hours per month.

So the takeaway is that if you are only 'over-panelling' by 5% very little if any power will be lost.

Like Bengi said, its about "Driving Miss Daisy". Driving the inverter in its sweet spot for efficiency more of the time. With inexpensive panels, it sometimes makes sense to "oversize" the array input , which is actually good technique as long as it meets budget and design goals and sometimes simply design goals.

Most dedicated grid tie inverters will allow 25% more in watts to be connected than they can continuously handle and export. Cool conditions and peak sun can allow greater efficiency than typical ratings and deratings, of both inverters and pv modules and is a small part of the total year for most arrays, a tiny bit or never at others.

I use a similar tact with offgrid battery charging. Its nice to have twice the array as battery max amps so the chargers will run at or closer to battery max charge amps under dismal insolation or even high heat and over more of the solar day.

In Michigan i dont see a probelm with heat though, its cloud cover or tree shade and "over paneling" is a rare beast for an offgrid and some grid ties for sure.

It depends, sometimes ill run an inverter with some overhead, either because they may add pv later or because i know the array im using will bang near nameplate for a couple hours each day dome seasons..... for thirty years. The inverter appreciates it, some customers appreciate it and as long as the inverter is a high quality inverter it will still have higher efficiency over a more broad input/output range.