I think we're coming at the same conclusion effectively that introducing marginal pricing would  be costly for the airline. I think the status quo, where coach overhead space is a race, is the best solution (to explicitly not solve it outside of business/first.)

That's not the issue. They have no marginal pricing, so the priced-in-ness does nothing to help ration that scarce space.

The issue is that passengers would viscerally hate it and a competitor would advertise "free" carry-ons and we'd be right back to the status quo.

Undisciplined

Them overbooking the max doesn't mean its not priced in, it just means that they count on enough people not using the max.