I ran into the same problem on a Pi Zero 2 W. After poking around a bit with the overlay file, I noticed that removing the slave-overlay: label here and the one line that references it here makes the overlay (example) work via hardware.deviceTree.overlays, and I don’t see any relevant differences compared to the resulting device tree of applying with dtoverlay.
That being said, I have no audio output (that’s a different thread I think, pls help), no matter how I set up the overlay, so I can’t be entirely sure this is all correct.