When you say "city water", I wonder if you are talking about a valve that on our coach is marked "City Fill". On our '06 Dynasty, the only valve in the service bay is the "City Fill" valve, and it does admit water to fill the fresh tank. So if you opened what I suspect is the only valve in the service bay, you did make it so that the fresh tank would fill.
The fresh tank does have an overflow tube as well as a breather tube on it. The overflow is to protect from overfilling. The breather is to admit air so water can be pumped from it without collapsing the tank. Both likely come out of the back wall of the tank, very near the top, within inches of the passenger side end of the tank, right in front of your passenger side drive tires. One line comes out of the tank and then splits into two, in that area in front of the tires. Water coming from that source is ok, but it does mean the tank is absolutely full.
Since you have the Aladdin system, you will find a pressure transducer on one of the walls of the fresh water tank. On ours, it is on the passenger side end of the fresh tank, right at the bottom front corner of the tank, behind the little heat exchanger for the basement compartment. You will see a phone type plug and cable leaving it to carry the data therefrom. That is a pressure sensor. It is possible that your fresh tank calibration may have been off, a bit. (You can fix that, yourself, if you choose to delve into it, but that's another story. The procedure is in the manual.) Let's assume that when it is indicating 75%, it is in actuality 100% full. If so, when more water is made available, to the point of going thru the overflow, that tank is becoming pressurized a bit. This is because the incoming flow is going to be more than the flow from the overflow outlet until the back pressure equals the incoming pressure. At that point, the tank is a bit overpressure. The pressure transducer sees that as an additional "head" of water, and reports the tank as being more full than it really is. (The same happens in the gray and black tanks, when they reach full and the water level begins to rise up into the internal drain plumbing and the roof vent pipes. So when you see those go higher than you expect, and likely quickly, be thinking about draining those tanks!!!)
Finally, Mr D is correct, if the "City Fill" valve is closed, as that can also cause the fresh tank to overfill. If the "City Fill" valve is open, as I think you said, it did fill directly from your incoming water line, as designed.
So, my suspicion is that all was as it should be, with the possible exception of the need to calibrate your fresh water tank sensor in the Aladdin. You can visually see the fresh water level in the tank if you open the basement door on the passenger side, just in front of the drive axle, and look under the black cover panel. That is also where your fresh tank drain valve is likely located. I marked the wall of our tank with a "Sharpie" at the level at which water just began to appear from the overflow pipe. With a measuring tape, I made marks at 25%, 50%, 75% and 100%. It's nice for a quick peek or verifying what the Aladdin is indicating.
Good luck with your new coach! You'll likely get some fantastic enjoyment out of it. You'll likely also learn a whale of a lot about the systems and features, and maybe how to use some tools you didn't know you needed. But that's part of the fun of owning one of these rigs. Enjoy!!
Jim & Angie, Boise, ID
2006 Monaco Dynasty Countess III
2017 GMC Acadia Denali