The behavior of an "Overwrite Sheet (Drop)" configuration is such that it breaks formulas (#REF) that point to the overwritten sheet and named ranges that reference the overwritten sheet. This is a bummer because the only way I've found to overcome the issue is to write a script that re-applies the named range. This works, but it greatly raises the barrier to using this tool and in some corporate environments it won't even be possible.
What would probably be a good alternative behavior is to delete the contents of the sheet, rather than the rows/columns/cells of the sheet. I think both probably have valid use cases but my proposed functionality is going to cause fewer issues and be the more popular behavior for most users. I believe there is a google sheets API call for just this kind of behavior...