This is a note for my future self. When encountering the following error in podman :

ERRO[0000] User-selected graph driver "btrfs" overwritten by graph driver "overlay" from database - delete libpod local files to resolve

Do as suggested to delete the libpod local files by doing

rm -rf ~/.local/share/containers/libpod

This resolved the issue for me on my openSUSE Tumbleweed system. If it is still bugging you, you might want to nuke the whole containers directory. This will delete all your containers and container data however, so use with caution!

# CAUTION: This will delete all containers and container data!
sudo rm -rf ~/.local/share/containers/

Additional information

The default settings are stored if /etc/containers/storage.conf. Don’t screw around there as it might be suggested in e.g. podman#5114. That will not solve the issue for you but will only make it worse:

ERRO[0000] The storage 'driver' option must be set in /etc/containers/storage.conf, guarantee proper operation.

Instead really stick to the suggestion of podman and just delete the libpod local files as suggested.