On windows there are two keyboard shortcut keys for pasting:
When pasting using the Shift+Insert into the groovy console script area text-overwrite mode is accidentally enabled by the code.
This doesn't happen when using Ctrl+V, I think there may be a bug in the keyboard handling code.
As a side note I'm left handed and thus often use shift+insert to paste so I leave one hand on the mouse (and i don't have to stretch my fingers as far).
Not had the chance to test with the latest version of the console, if it's already fixed please close this bug report.