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No, the overdrive really shouldn't make any objectionable noises.
Odds are very good that it needs a rebuild. My first suspicion would be the layshaft and its needle bearings.
I'm still a little confused. Are you trying to use a Volvo M41 gearbox in an MG or using a MG gearbox in a Volvo? Or maybe you're trying to mate a MG overdrive to a Volvo gearbox.
I'd rebuild it before installing it. Inspect the layshaft and bearings carefully.
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"Differences of opinions should be tolerated, but not if they're too different' - Sharon Craig
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