As a guard who has been both the overtaking train and the overtaken one, these exercises (other than where a train was stopped waiting crew or had a fault) always seemed to create more disruption than they solved. Overtaking for regulating purposes in Oxford Road usually ended up with two late trains instead of one.
On one occasion they used the stretch past Longsight to regulate. I (the late train) was crossed over to the fast at Slade Lane to overtake and regain my booked path before crossing back to platform 14. Flaw in the plan was that the process of crossing over twice lost a few more minutes. Should have put the on-time train over and let the late one overtake it on the slows.
Are you talking about overtaking in the Down direction?
This very rarely happens in normal running at Oxford Rd unless there is going to be a known wait for train crew.
The most common overtakes are in the Up direction, usually to bring a late airport express back in front of an all stops airport. You're right in that it usually puts a little extra time into what was an ontime all stops airport but overall delay is definitely reduced.
Piccadilly expect Oxford Rd to do the regulating accordingly for services on the towards the airport as the delays incurred in doing so at Longsight are much more likely to impart delays to other services.