We're still having this issue in ArcMap 10.8, publishing to stand-alone AGS, using AGOL to view & develop web map. Now almost every time we overwrite the map image layer for a specific map service, publishing is successful, can see new, changed, or moved layers at REST endpoint (seen in AGOL Item Details) but not in AGOL Map Viewer or Map Viewer Classic (Contents panel nor in the map), & also not seen in the deployed web app. But it's not consistent. Sometimes overwrites work fine, sometimes they don't.
Images attached, layer of interest is "83 Industrial". An interesting thing I noticed is found when you compare the "AGOL_OpenInArcGISDesktop.png" & "AGOL_OpenInArcGISPro.png" images, you'll see that downloading FROM AGOL, the Desktop lyr file is correct, whereas the Pro pitemx isn't.