When I had a "ten speed" in 1972 it had 27" wheels, no fenders and no overlap. Later racing bikes had toe overlap but it wasn't an issue for the speeds and wheel angle. Some later 700c touring bikes might or might not have overlap w fenders. When I had a custom 26" wheel sport/tour bike made up it had no overlap with fenders. Got a 56cm 700c LHT and the overlap with fenders was totally unacceptable to me given the range of wheel angle at low speeds or starting off at a light with a heavy load. I wasn't partial to the handling so I got a 26" wheel LHT and now the handling is better and the overlap is gone.
My prejudiced feeling is that toe overlap is not compatible with a utilitarian bike that needs to maneuver at slow speeds where wide steering angles are necessary.

58cm may not necessarily solve the problem.