Submitted by Cyfrin, also found by Josiah, QiuhaoLi, and RaymondFam
https://github.com/code-423n4/2023-04-eigenlayer/blob/5e4872358cd2bda1936c29f460ece2308af4def6/src/contracts/core/StrategyManager.sol#L197
https://github.com/code-423n4/2023-04-eigenlayer/blob/5e4872358cd2bda1936c29f460ece2308af4def6/src/contracts/core/StrategyManager.sol#L513
In EigenLayer, watchers submit over-commitment proof in the event a stakers balance on the Beacon chain falls below the minimum restaked amount per validator. In such a scenario, stakers shares are decreased by the restaked amount. Note, that when a full withdrawal is processed, stakers deducted shares are credited back to allow for a planned withdrawal on EigenLayer
If such a staker has delegated to an operator who gets slashed on EigenLayer, there is a possibility that this staker completely bypasses any slashing penalties. If overcommitment reduced the shares in the stakers account to 0, there is nothing available for governance to slash.
It is reasonable to assume that governance calls StrategyManager::slashShares to reduce a percentage of shares (penalty) from all stakers who delegated to a slashed operator and then resets the frozen status of operator by calling ISlasher::resetFrozenStatus.
By simply unstaking on the beacon chain AFTER slashing is complete (and operator is unfrozen), an over-committed staker can simply unstake on beacon chain and get back their shares that were deducted when over-commitment was recorded (refer to PoC). Note:  these shares have not faced any slashing penalties.
An over-committed staker can avoid being slashed in a scenario, in which their stake should be subject to slashing and so we evaluate the severity to MEDIUM.
Consider the following scenario with a chain of events in this order:
Over-commitment needs to be accounted for when slashing, such that a staker is being slashed; not just shares in their account, but also the amount that is temporarily debited while recording over-commitment.
Consider adding a mapping to StrategyManager that keeps track of over-commitment for each staker and take that into consideration while slashing in StrategyManager::slashShares.
Alex the Entreprenerd (judge) commented:
Sidu28 (EigenLayer) confirmed via duplicate issue 210
