Why does IP overlap

Ability to overlap networks

There is nothing "wrong" with what you see. How this Windows Server computer connects to these two networks does not say that the hosts on each network will communicate with other networks.

Consider:

The corresponding interface of this router is set as the standard gateway for the hosts connected to each network. On the Windows Server computer, the IP address of one or the other router interface is set as the default gateway.

You do not want to assign IP addresses from the 192.168.3.0/24 network to the hosts in the 192.168.0.0/16 network. Hosts on the 192.168.0.0/16 network require a static route, which is specified in their routing tables for the 192.168.3.0/24 network, in order to communicate with hosts on the 192.168.3.0/24 network. This is impractical, but by no means a "deal breaker".

To edit:

In the example above, the Windows Server computer is delivering data to the correct destination without the need for static routes. The server has entries in its routing table because interfaces to each subnet are local. All of the fields in the sample scenario will it have the easiest time.

Your example (below) is a different animal from my example and is different from your question:

You're talking about a server that has a seemingly static route to the 192.168.0.0/16 network via 192.168.9.2 and three static routes to a 192.168.6.0/24, 192.168.4.0/24. and 192.169.8.0/24 network that can be accessed through a gateway at 192.169.1.254.

Without knowing more about the topology (IP addresses assigned to the interfaces on the server, layout of the different networks behind the different routers) it's difficult to say much. Certainly, in and of itself, there is nothing "wrong" with anything I see in your image other than the obvious and blatant fact that networks falling under 192.169.0.0/16 are not an RFC 1918 address space and are not in the private domain networks should be used.