Fresh water tank dumps itself through overflow pipe, why?

If your tank drained down to 1/4, odds are that is how far your overflow tube is inserted into the tank. This causes 2 problems. First one is that once you get that much water in, there is no where for the air to escape to. So as you fill the tank you are pressurizing it by compressing the air above the water. Then the 2nd problem happens. You have pressure pushing the water out the tube to equalize the pressure.
You will want to shorten the hose inside the tank.