Overpowered characters are a type of character that often:
Overpowered characters takes any challenge or struggle out of that situation. It makes everything too easy. Having everything easy gets extremely boring, very quickly. (Which is why characters who are overpowered are generally boring, because they never struggle, they never fail, they never falter and their audience can't easily relate to them. Compare Superman to Batman… Batman is human, fails and struggles which makes him a more relatable character than Superman who can power through most situations.)
People often don't like when other characters are too powerful. And it forces players to up their own characters powers/capabilities in order to match that overpowered character. (Which often then forces that over powered to increase again to remain powerful.)
Overpowered characters typically carry with them several other problematic behaviours. For example they:
Players with overpowered characters tend not to get much roleplay simply because if people aren't trying to be on equal terms then they want nothing to do with overpowered characters. Like mentioned previously, overpowered characters tend to be boring (lacking struggle or conflict). Conflict is what drives most situations in some way. And having a character that can easily resolve a conflict by snapping their fingers makes things dull.
Overpowered characters are relatively easy to avoid if players:
And like with any situation, if you're not sure about something… Ask. Ask the roleplay creator if something would be acceptable. It doesn't take much time and it helps prevent issues.
The only exception when it comes to overpowered characters is that very often canon characters (especially main protagonists) may have extremely powerful capabilities. These powers are inherent to the character. Like for Superman… He's known to be able to perform feats like moving planets to surviving supernovas. Even then, writers may still downplay his power to keep him interesting and to give him new challenges and struggles.
So even if a character is extremely powerful in their universe that doesn't mean they won't be toned down for in that particular roleplay.