Is overthinking a sign of average intelligence? Don't intelligent people simplify and think less?

No to both questions.

The concept of ‘overthinking’ is not in an intelligent person’s lexicon.

Non-thinkers accuse thinkers of being over-thinkers as a way of undermining them and of putting a positive shine on their own deficiencies.

Yes—intelligence is often able to achieve simplicity in its results. But simple results are generated by extremely complex processes.

Consequently, somebody whose intellectual repertoire is confined to a frozen set of ‘simple’ concepts is the very pattern of intellectual mediocrity.