Indeed modulation varies LWT, though with a rather simple algorithm, at least for my older hybrid, but I think it might apply to the monobloc too:
-if the room is too warm for more than 20 minutes, the LWT setpoint is lowered by 1 step size (which is 25% of the max modulation setting [9-06] which is default 5C (max 10C), so default step size is 1.25C),
-after another 20 minutes of the room being too warm, LWT setpoint is lowered by 2 step sizes,
-until the room temperature goes below RT setpoint, in which the LWT setpoint goes back to regular, or if the room temperature is more than 0.5C too warm, the heat pump switches off,
-and if the room is more than 0.5C too cold, the heat pump switches on (if needed), and after 10 minutes being more than 0.5C too cold, increases LWT setpoint by 1 step size, and after 30 additional minutes, increases it by 2 step sizes,
-if room temperature rises above 0.5C too cold, LWT setpoint increase is limited to 1 step size, and if room temperature reaches RT setpoint, LWT setpoint is set back to regular.
There is no interaction between modulation and overshoot other than that the not so subtle LWT change due to modulation can trigger an overshoot so it is best set to 4C.