tbh - I'd rather have pads that over hang the disc than pads that don't meet the edge of the disc, that way you do not get a rusty crusty ridge on the end of the disc.
But that said it may be that the pads are not fully located down and held down by the retaining springs in the first place.
It'll be interesting to see what you find when reassembling with new springs and pads.
I think the issue with pads overlapping the disc is that as the pads wear more and more there is a risk that the unworn edges will meet and prevent the pads hitting the discs properly.
But as you say, it may be a location issue caused by the retaining clips and/or the pads. IME disc pads are not made to particularly exacting dimensional tolerances,
