I am working in MS Project with a project someone else set up. This project contains 29 activities which are auto scheduled, has a minimum start date constraint on an activity, and two milestones. The behavior of the milestone is odd. It seems like the milestone itself is arranging the successor events so the resources have no overlapping activities. When I take out the milestones and adjust the dependencies I have overallocation warnings in the indicator column. In addition multiple activities with the same resource are scheduled on the same date In the Gantt chart. I tried switching the activities to be manually scheduled and the same thing happens. How do milestones effect the resource over allocation? How do they affect the assignment of the start dates of the successor activities.
Milestones don't directly affect resource allocation. They are just another element in your schedule (tasks, summary tasks, and milestones). Milestones are scheduled the same way tasks are except they have no duration.
It is likely that the milestone you are referring to was being used as an anchor to prevent an overlap of resources. As an anchor, I mean someone put a constraint on it pushing it into the future to avoid a resource over-allocation. Without seeing an image of your Gantt, I can't confirm this, but that is my thought. This is not the way I would do this.
My preferred method would be to remove the milestone and simply add task relationships that take into account the sequence of work the resource will perform. This will provide for a realistic sequencing of tasks rather than allowing Microsoft Project to resolve the over-allocation. I don't ever want Microsoft Project to make resource leveling decisions for me in my schedules.