Automagic Forum

I want an overlay that knows where it was tapped = relative X Y coords. Like an Ontap function. As a bonus, if any tap/swipe occurred outside the overlay.

Can this be done with a widget?

No sorry, that's currently not possible with a widget. Watching taps outside the widget is also not possible and I think that this can not be done anymore on newer versions of Android.
On a rooted device you could try to react to touch input using trigger Command Output and command getevent. This post contains some hints to react to volume buttons but touch input should also be visible in the output of the command when I recall correctly.

How about a 0% opacity widget overlay with dimensions of screen?

This would consume the touch event which might not be the desired result, but otherwise this should work.

Another way is with a grid of very small buttons...

Version 1.25 will provide variables screen_x and screen_y to the executed clickable action (for example action Execute Flows assigned as the single action of a widget). This only works for overlays but not for regular widgets placed on the launcher/lock screen. Note that the widget consumes the touch event so it's a good idea to use a widget that does not cover the entire screen like I did .

When the overlay consumes the click event, maybe it's possible to reproduce it with control ui action underneath the overlay?

Unfortunately Control UI has to use the accessibility features to simulate clicks on user interface elements which does not work on all elements (games, graphical elements etc.).
On a rooted device you could use Execute Root Command: input tap x y to simulate touch input that will work on more user interface elements.