Pax should holder their coats until luggage has been accomodated and then place the coats on top. Not only does that provide for more OH space for bags, but it also stops the coats from being trashed.

On the other hand, there is no such thing as "your" space in the OH. If you have one carry-on and it fits under the seat in front of you and placing it in the OH means that there is no space for a larger bag, it's entirely appropriate for a FA to require you to move the item (or, just gate check it if you refuse).