I have to say i find this overshooting problem quite strange.It seems to be a FM bug to me rather than a modelled result.ive heard many theories as to why in AH when your engine is shot out your landing and stopping distances are greatly increased:
1. the propellor drag is reduced
2. the brakes now have no power and so work less efficiently
3. with no wash from props the flaps and elevators have less authority and so produce less drag
4. combination of all of above

the propellor causing less drag im not sure about but i would have thought a stopped propellor in a pitch that bites the wind would cause a great deal of drag but im not sure if this would be less or more than an idleing but spinning prop of the same configeration.
Brakes having less power seems to make sense but were they electrically operated in most aircraft? I know a lot of LW planes were but even with this being the case wouldnt the batteries hold enough charge to operate an electrically operated hydrolic system?
wash from the props must have an effect on the surfaces of flaps and elevators set in a position against its flow but again i cant see it being so pronounced as in AH.
combination of all these? who knows it could be i guess.The brakes loosing power sounds the most likely to me but there is still the strange way the aircraft seems to glide much better when the engines stop. happens sometimes after oil is hit i find.Anyone else notice it?