Does not look genuine to be honest. The only official overstrikes I know at the moment are Sichuan 1926 100 cash over Henan 20 cash and Uighurstan 20 wen over Sichuan 10 cash.
I was suspicious of it, but don't know these well enough to be sure. For $3 it was worth a shot.
Certainly appears modern, and there's been a whole bunch of counterfeit Chinese error coins coming on the market lately. Usually they are made like that in one shot, rather than making a coin and then making the error on it separately.
What a splendid head... yet no brain. -Aesop