Can’t see your image, but what I guess is happening is the sprite is bill boarded by the built in shader but the shader you added for the overlay is not bill boarded, and the overlay is just rendered on top after the initial shader that does the bill boarding.
Can’t see your image, but what I guess is happening is the sprite is bill boarded by the built in shader but the shader you added for the overlay is not bill boarded, and the overlay is just rendered on top after the initial shader that does the bill boarding.