Depends on the presented evidence and balance of probablities.
1) If both parties would agree at the heariing that overlapp was broken than 'clear ahead'
2) If they don't agree than probably there is a reasonable doubt and 18.2.e

While there may be reasonable doubt on water, the diagram shows a break in overlap.

Red at position 2 would already have to have started its turn down to be in the location shown at position 3. Even with this diagram assumed as fact, there is reasonable doubt that red entered the zone clear ahead. Maybe she did, maybe not. Neither skipper could have known this with absolute certainty.  When. precisely, did red enter the zone? When, precisely, did red's turn re-establish an overlap? Reasonable doubt. Besides, even if red was factually clear ahead, the abrupt maneuver was made expressly to avoid the obligation to provide the room that rule 18 requires, and almost instantly, Blue is trapped in the position that Rule 18 is meant to prevent. Not very Corinthian. 

I don’t know why Blue would concede that the overlap was broken immediately before Red entered the zone & Red entered clear ahead - exactly where the zone is is always a judgment call on the water and there’s no way for Red to prove she got this tricky maneuver exactly right. Even witnesses will be applying their own judgment as to where the circle was, so their "corroboration" has little value..

Given that, I’d be inclined in most cases to give benefit of the doubt to Blue. And I’d probably not include a diagram in he decision since to match the written facts it would have to be ambiguous anyway.

If you ever Ump a team race, this is what happens at Mark 3 all the time.
Blue will generally concede the break and luff up to avoid contact at the Mark or protest from Red.
Kim

Kim has a good point, but where did things stand at the exact moment that Red entered the zone? I.e., position "2.1"? 

I ask since, in some boats and conditions, one boat might surge forward on a wave while another slows dramatically on the backside of a wave... 

I can see it with a well-calibrated umpire and a two-length zone, but much difference with a fleet racing skipper, especially at lower levels. 

As stated before, the scenario fails to show the critical moment in order to make a determination. If there was contradictory evidence, I would suggest that considering the ambiguity of the recognition of the "zone" under manic close racing conditions, 18.2(e) would kick in. If there is reasonable doubt that a boat obtained or broke an overlap in time, it shall be presumed that she did not. 

Per the diagram, it is clear that red is clear ahead at position 2.  It's up to blue to convince the jury that Blue did reestablish an overlap.  It's going to be a hard sell.  Based on the positions of red at positions 2 and 3, red bore away rather slowly.  That makes it unlikely that blue established an overlap in time.

> Per the diagram, it is clear
True, but all diagrams are approximate reconstructions. With both boats protesting the PC will presumably be presented with two diagrams, one showing the overlap broken and one not.
Isn't it down to last point of certainty? If the PC is certain the overlap was broken outside the zone then doesn't 18.2e support Red, but if the PC considers there is doubt that the overlap was broken then 18.2e supports Blue.