Horizontal and vertical overlap settings work fine with the stacking nameplate setting, but no longer work with overlapping setting. No matter what I change the cvar value to it will not have any impact on the locations of the nameplates.

That's most likely not an issue of Threat Plates, but WoW itself. Overlapping is controlled by CVars. The only thing TP does is changing these CVars. You can check that by disabling Threat Plates and see if nameplates react differently. In my experience, it will be the same. Besides Blizzard fixing this, there is nothing I could do, I think.