After the alarm is founded, does the overlord revert to their normal abilities? I.e. can they activate up to two tiles and spend energy to reroll, etc?
Yes. My reasoning: the four bullet-points under the "Hidden in shadows" special rules part define that the OL cannot do those things he normally can do, but "Hidden in shadows" only applies "if the alarm has not yet been raised." Thus, as soon as the alarm has been raised, "Hidden in shadows" disappears, removing those four bullet-points (i.e. the limits it imposes).