I'd say it extends more than overlap: If a name is not found on the Handshake chain, the resolver "falls back" to legacy ICANN DNS. Since all current gTLDs are reserved as well as the top 100k, there won't be any overlap for a while.

That's great. I didn’t know that all the gTLDs are blacklisted, I thought they only the first 100k. This should make the transition smoother

That's just an immediate non-starter then. Nobody is following all of these esoteric systems in the case that one of them gains marketshare, it guarantees that people will be phished and defrauded as soon as they use it. We had this issue with namecoin already, where people went and registered names of prominent people and tried to use that to solicit fraudulent donations.

That’s a fair point and I share the same concern. I would have allowed anyone that owns a domain and can prove it, to get their domain for free in the new system. You could do the proof similarly to how Let’s Encrypt does it