My ideal is some of each — but that doesn’t have to mean separate doc sets. Good reference doc includes overviews at the top level and for individual packages/modules. If I only have API reference doc it can be hard to figure out how to get started; a decent overview covering how it’s intended to be used (not just what’s in it) and showing a non-trivial but accessible example both help immensely.
The SO documentation project was only about reference doc, but other doc projects often involve other types of content too. This varies depending on what’s being documented; I’ve mostly worked on products that have APIs but aren’t only APIs. So there’s also doc about installation, configuration, setting security policies, monitoring, routine maintenance, and so on.