What can an investor do to consistently generate passive income from a market that may be overpriced?

Look for undervalued dividend arisocrats. These refer to a category of stocks in the US market that have a record of raising their annual dividends for 25 years or more. There are some which have been beaten down in price due to a myriad of factors and are recovering.

I would say leave your money in a high-savings interest account, and wait for the market to become less overpriced first. As the more you pay initially, the more profits you will have to generate in order to break even.

Otherwise, consider other diversifications of investments and spread your money out so that you won't suffer from just one particular overpriced market.

I'll take it that market means the market in general, not specifically stocks. If you are buying into something over price (and massively), why not take some profit off the table and re-invest into something that's not overprice, or not correlated to the particular asset class that you're currently invested in?

You can trade around a core position, leaving a bulk of your investments intact, selling off, say, 20% to take profit, and look for somewhere else to deploy it into. You'll enjoy passive income from your slightly reduced holdings still, while freeing up cash to be deployed elsewhere, or back in the same asset class if the prices correct a little. And if you were wrong and the asset class continues to appreciate, you're still invested.

Money goes where is it best treated.

Move to another asset class. Bonds, money market instruments, and annuities give you passive income with low correlation (if any) to the stock market.