That makes sense that the FKMS overlay should be enabled.
What I have observed is if I comment out "dtoverlay=vc4-fkms-v3d" the screen will run through the initial boot showing the colours and then the retropie splash screen and then crash to the console showing the error message.
However If I leave "dtoverlay=vc4-fkms-v3d" in the config file it runs through the initial boot showing the colours then the retropie splash screen then it crashes to a black screen. interestingly enough I can still connect to it over SSH but if I try to run emulationstation I get the below errors;
Oct 15 11:12:13 lvl0: Error initializing SDL!
No currently active connector found.
Oct 15 11:12:13 lvl0: Renderer failed to initialize!
Oct 15 11:12:13 lvl0: Window failed to initialize!