But I 100% think you are lying about not hacking or at least lying about the overlay since there is no way you decided to open Garry's Mod, open your steam overlay page and watch porn THROUGH GARRY'S MOD STEAM OVERLAY. WHO DOES THAT? So that's why I think you are lying however Morgan's behavior is still unacceptable since he did everything he did without valid proof.
EDIT: He has since informed me that it was RAPE porn so I now believe he was not actually hacking.