The documentation for the overflow states:
OVERFLOW – Indicates that events might have been lost or discarded.
It does not say under what circumstance should I expect event to be lost or discarded? At first I thought it would be a result of writing a lot of files very fast to the folder. I created a few thousand files with zero size and moved them to a monitored directory. No OVERFLOW.
What am I missing?
From JavaDoc.
See also Steven C's answer. His point about unconsumed events makes the difference, I think.