to magnify beyond the limits of swag; to represent the amount of swagger you possess disproportionately.
to increase or enlarge the amount of your swagger abnormally through the use of bling, low pants, or other 'gangsta' clothing items/accessories.
person 1: 'hop up out the bed, turn ma swag on, have a look in the mirror say whats up'
person 2: 'dude, you are overswagulating so much'
person 1: 'that chain got me thinking you were a gangsta.'
person 2: 'HOMMIE imma legit gangsta. COME CHILL AT MA CRRIBB WEST SIDE REPPIN YEEWWW'
person 1: 'WOW you're really overswagulating!'