The "Allow Generator Overwrites" box should stay ticked when generators are set and working, or it has to be ticked only when switching between generators (once I choose the exact generator, the check sign disappears).

For your original question:- In the case where you have a running (green icon) generator and you click on its icon the 'Allow Generator Overwrites' checkbox is ignored. The generator is not overwritten. As others have already answered above, that checkbox is only relevant when you have a non-running generator (Red icon) and you want to update the settings of that generator with (a) the preset, (b) programs (c) settings information.

As an additional safe-guard; when making a new preset I'd suggest to Save it (use disk icon on preset tab) before trying it out.

If in doubt, the simplest method is (i) load the preset on preset page and (ii) on control page tick on generator overwrite and (iii) click on icon & run.

This has another point because I have recently discovered that as any running generator loops back to the start of its preset it reloads the programs/settings page with that running generators information. That is of course, not what you want if you were in the middle of making some new settings for another generator.

For more details, please check the link:
https://www.spooky2.com/forums/viewtopic.php?f=5&t=8402