https://drafts.csswg.org/css-inline-3/#baseline-source

The definition of this property doesn't mention the overflow:hidden behaviour explicitly - that is we'll force baselines on scrollers (overflow:hidden and friends) to the block-end margin edge by default.

For the non-auto cases (baseline-source:first and baseline-source:last) we can likely allow people to have the same behaviour as baselines within scrollers for flex/grid, that is clamp the baselines to the border-box rect if present.

For example:

baseline <div style="display: inline-block; overflow: hidden; baseline-source: first;">I am aligned</div>

Ian