I agree though that circling in the overhead with other aircraft arriving has potential for something nasty to happen.
Not if the other arriving aircraft are, when they get the field visual, manoeuvring so as to put the airfield on the left hand side of the aircraft (I assume left hand circuit here) and therefore orbiting the edge of the atz in the same direction as the a/c which are already overhead and, of course, maintaining a lookout.
Would be interesting to see the stats for midairs/air proxes in the overhead as opposed to in the circuit/at circuit height - I would suggest the latter figures would be much higher.