How does it work?

Hammer throw does 8 damage to an enemy and has overkill.

Overkill states "If an attack with overkill defeats a minion, excess damage from the attack (damage beyond the minion's remaining hit points) is dealt to the villian.

Loki states " Forced Interrupt: When Loki would be defeated, discard the top card of the encounter deck. If that card is a treachey, heal all damage from Loki instead."

So am I right in assuming that all 8 damage goes on Loki and excess damage only moves to the villain if he doesn't flip a treachery?

"How does Loki interact with overkill ? If you do six overkill damage , would you “kill Loki ” then assign the two to the villain , then activate Loki ’s card ability to see if he revives ?"

"The overkill damage would be applied to the villain before determining whether or not Loki revives ." -Caleb|

Found this answer on discord, think someone emailed into the designers in regards to this.