I have pitched on a yeast cake a couple of times, and can't identify any negative effects in the resulting beers with the exception of the possibility of lesser flocculation. Aside from that, I was happy with the result and the process was as simple as it seems.
Overpitching? Yeah, most likely. Did it negatively affect my beer? Not that I can tell.
It was Nottingham.
Dry sachet pitched into a 3.4% mild ale
ESB (6.3%) was pitched onto yeastcake from mild ale.
IIPA (8.2%) was pitched onto yeastcake from ESB.
Yeast went into compost after this
All three brews were great. I fermented in the mid- to upper-range for the mild and ESB, and fermented in the bottom range for the IIPA (for yeast characteristic purposes). Loved them all.
I swirled the yeastcake and created a slurry prior to adding the wort. I did NOT intentionally aerate my wort at any point, nor did I intentionally aerate my yeastcake. Because a yeastcake is most likely greatly overpitching, by the time the yeast is mixed with the new wort, my understanding is that the population levels that are aimed to be reached by the yeast prior to anaerobic fermentation are already present, therefore the lag and reproductive phases are essentially skipped which mostly does away with the oxygen requirement (though, there is a matter of sterol production) and the yeast move right into the anaerobic fermentation. This means that you'll see active fermentation beginning within an hour or three of adding your new wort to the yeastcake.
There is an idea that moving up in gravity when pitching on a cake is good since each fermentation creates new yeast, therefore the population is much larger and higher gravity beers can use that larger population better than lower gravity beers.
If I were to do this again, and I probably will because it worked very well for me, I would split my yeastcake in half after each fermentation. I'd either toss one half if it came from a high gravity beer, or store it if it came from a lower gravity beer. Half of a yeastcake is probably STILL considered overpitching by quite a bit, but at least your reducing how much you're overpitching by.
These were ales and that's how I'd proceed for ales. If I were to do this with a true lager yeast strain then I would NOT split the yeastcake - I would pitch on the whole yeastcake. Lagers typically require a much higher pitching rate than ales and my first time experimenting I would use the whole cake to ensure I don't handcuff myself