help understanding overlay behaviour with images

[David Bremner <david@tethera.net>]

I'm not sure if this is a bug or if I misunderstand something.  In the
following code sample I expect the image to be hidden, but it isn't,
unless I also hide the previous character, i.e. pass 10 as the first
argument to make-overlay. In both Emacs 28.2 and 29.1 (tested on
Debian), it gets some weird in between state where the point skips over
the image when running left-char or right-char, but the image stays visible.
  
  (let ((buf (get-buffer-create "image-buffer"))
        (img (find-image '((:type xpm :file "attach.xpm"))))
        (overlay nil))
    (switch-to-buffer buf)
    (insert "0123456789")
    (insert-image img "x")
    (insert "0123456789")
    (insert "\n")
    (setq overlay (make-overlay 11 12))
    (overlay-put overlay 'invisible t)
    (message "props=%s" (overlay-properties overlay)))

P.S. I'm not subscribed to emacs-devel, so please CC me any answers.