All analog sticks has overlayX_descY_pct = 0.65 parameter which should describe stick sensitivity. But in fact this does nothing, because valid parameter name is overlayX_descY_saturate_pct = 0.65

Docs:
https://docs.libretro.com/development/retroarch/input/overlay/

Source:
https://github.com/libretro/RetroArch/blob/ed3412c0040622488fe46431d1c17e8bf837e0d6/tasks/task_overlay.c#L261

This is 'reverse sensitivity': smaller value = more sensitive analog.
I think just 'fixing' param name in overlays or in RetroArch is bad idea because all analogs become too sensitive. Size of this button should be increased accordingly to saturate_pct value. Notice the image thumbstick-pad_arcade.png from 'flat' overlay pack - it already has transparent padding so visual size is smaller than actual hitbox. Is it designed for use with this parameter?
I think best value for this param is 0.5 - thumbstick image sticks exactly under touchpoint.

You can use online editor to test this. Default image set contains all images from RetroArch 'flat' overlays.
https://github.com/Valent-in/retropad-editor