Not a bug
BYOND Version:511
Operating System:Windows 7 Ultimate 64-bit
Web Browser:Chrome 69.0.3497.100
Applies to:Dream Seeker
Status: Not a bug

This is not a bug. It may be an incorrect use of syntax or a limitation in the software. For further discussion on the matter, please consult the BYOND forums.
Descriptive Problem Summary:

Numbered Steps to Reproduce Problem:
Set a number of loop times on an icon, set an obj with said icon,
add the obj as an overlay to an atom.

Expected Results:
The animation is shown

Actual Results:
Only the first state is shown

Does the problem occur:
Every time? Or how often? Every time
In other games? Yes
In other user accounts? Yes
On other computers? Yes

When does the problem NOT occur?

None that I know

Another bug to add to this: when I add an overlay with an animation, with the loop time set as infinity, the overlay showsup in the final state and then starts over...
This is not a bug. If you add an overlay to an object, but the icon and icon state haven't changed, its creation time does not update. Overlays don't use their own creation time, but depend on the creation time of the parent atom instead.

Visual contents will however maintain their own creation time, making them the correct choice for this.
Lummox JR resolved issue (Not a bug)