I'm stuck on something and require some help. I've made an object, and I want to flick an icon state of that object's icon on the person using it. For example: A player picks up an axe and equips it. He then continues and attacks some random person because he feels like it. How could I get it to flick an attack icon state from a verb on the axe. Thanks for any help in advance.

As far as I know, you cannot do that with overlays. You may want to use /image objects attatched to the mob, and visible to the world. Look them up for some examples.