TL;DR skip first paragraph
"Prod inventory. Stg inventory. Test inventory. My grandfather used to tell me stories about the old days, where Prod inventory lives happily inside tower inventory land. But that all changed when Stg inventory and Test inventory attacked. Only the Choosen Engineer can help to fix this problem. But when the world needed him most, he vanished. A thousand milliseconds have passed and the Stg and Test Inventory are nearing victory in the War. But I haven't lost hope. I still believe that somehow, all Engineers will unite to save the world."
We hit tower maximum number of licensed instances. 1500 instance licenses are used, but we believe some of instances are not actually used or already terminated. But it's too many for Site-Infra to track unused instances or terminated instance escpecially dev/test environment.
Because of this problem, we can't add new host to inventory. Can't testing on new instances! Can't release to new instances!
By enabling overwrite option, terminated instances will be removed from host list every time you run the inventory update, which reduce number of instance registered in tower.