when I am in game, and press Shift+Tab, the Steam overlay does not want to open (literally nothing happens). I have the overlay and the shortcut configured in the steam settings.
Any ideas if this can be fixed, or is it just wayland problem that i have to wait out?
It's not a Wayland problem, the new Steam Overlay works fine for me on Sway. Sorry, not sure why you don't have it, maybe a missing dependency or something? What are you running?