Overtraining is what happens when an athlete's training frequency is greater than their body's ability to recover. That is, by the time the next training sessions comes around, they haven't yet recovered from the last one. This can harm overall performance for obvious reasons.

That may lead to a plateau, but I think plateau's happen more often when the athlete ceases to learn from training sessions. And that happens when they're just doing the same thing, over and over.

All practiced activities show diminishing returns. If you practice 5 days a week (assuming your body can handle it), the benefit of practicing 6 days a week (assuming your body can handle it) is not going to be the same as going from 1 to 2 days. But if your body can handle it, you probably will still improve.

Have you ever seen personal bests charts? Save specific cases of breaktrhoughs, it plots very logarithmic for everybody. That is diminishing returns, more or less.