For those that cares :)
I did some more testing of this, trying to figure it out. And based on the article - "Understand the picking of newly created/spawn instances since R101" I cant see why it shouldnt work as its pretty much an exact copy of that. But for some reason the newly created instances doesnt seem to work with the overlapping test, when its added as a subevent. As im setting lots of other values as part of these subevents which works fine.
However if you move the overlapping test into its own event it works fine, and do some workaround, i think you can get it to work kinda the same way.
The purpose of this is to make a part of a random map generator that add X amount of different graphic elements to a map, but at the same time makes sure that if these elements are not overlapping, they are destroyed and a new one is made.