OK, to put it basically......
The motors are driven by the esc's by way of square wave pulses to accelerate/decelerate them.
Since all motors also act as generators, when the motors decelerate they produce a current (back emf) which can be detected. (It also assists in the rapid braking on the I1).
Since the flight controller knows what signal it is sending to the esc's and the esc's produce the drive pulses, if the firmware detects that the back emf isn't corresponding to the deceleration (or acceleration) commands being sent then the FW will throw up an error.
Unfortunately, the DJI coding chimps have overdosed on bananas again and made the algorithms a little over zealous in throwing up the 'error' message - this should be tweaked in the next FW release which is not too far away.
It almost seems like they deliberately put in a new gremlin every update, that they 'address' in a next update. Just so that everybody keeps updating to the latest. It has been done many times before in the software industry.
I am sure that the motor overload status detection was already in the firmware since the very beginning (it was already in the NAZA-M firmware 3years ago) but it just never generated a message in GO. The message suddenly started to appear after a GO update in my case.
My old Phantom1 always, starting halfway in the flight, showed an occasional red blink (motor overload warning) on the tail light when I gave it full throttle. In colder weather it happened even earlier. I could (and still can) fly for another 5 to 8 minutes until the first slow low warning blinking came on. I think this is just the same.
@The Editor
So if I would want to get rid of this overload message I just have to upgrade to a firmware that doesn't comply with emergency procedures in my OM?
Mark, do you know if anything else changed in the latest FW? Still the CSC delay in there? Sorry if that would let us stray off topic. No information from DJI about anything they 'fixed' in this firmware except addressing a Z3 HDMI out issue that I never encountered.
The overload message is annoying and distracting. The first few times I immediately broke off the flight, stopping my operation right there. But it seems it's only a message about something we can't influence or do about, nothing else. DJI probably had too many warranty issues with long range FPVers.
Ergo, 'motor overload' is information overload.