I had the same question. On a recent Icelandair flight I was seated near a three-generation family group of seemingly inexperienced flyers. The oldest man sat down in the middle seat next to mine holding his carry-on bag in his lap. Another family member told him to put it in the OHC. He did, but lengthwise. Then the rest of the family put theirs in lengthwise. I asked him if I could turn his to fit better, and when he didn't object - he may not have understood - I did so. Then all the rest of the family turned theirs the right way. But flyers on Icelandair are generally more laid-back than on some other airlilnes.