They can also cause a lot of friction because their higher level of knowledge and experience can make them refuse to follow established processes and procedures, even when there are very good contextual and historical reasons for why those processes and procedures exist at that particular organization. This can cause a lot of resentment among their coworkers.
Personally, I have never worked with an overqualified person who didn't quickly develop what is commonly referred to as an "attitude problem". That's of course just my own experience.