The Overlord cannot make the hero reequip to attack, correct (as the hero currently has no MP to spend)? i.e. If the Charmed hero has a Melee weapon equipped, the OL cannot swap it for the bow in his bag to attack a far away hero...

Right, also he cant use heroes fatique but he can use all his skilles and eguiped items. OL cant make hero move due to fact that charmed hero dont have any MP. All he can do is to attack, but u can use aim from cars if u want .