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Burna Boyz get the option to turn their burnas into power weapons, which means that since it is unusual, it would be AP 3. They cannot turn their power weapon into a power axe magically by adjusting their nozzles.

I believe that there is no shenanigans as this seems pretty cut and dry, but is there any other ambiguity with this that I may need to know about before I start using them in 6th ed?

I'd say you count them as AP3 (they should have just said that anything that was only considered a PW would be under PSword effects). Talk about what seems to be the 40k Rushed Edition...

I was also wondering about them Overwatch'ing and then CC. Do they lose their PW attack that turn? Seems fair but I couldn't find anything about this...

It would be funny if you counted them as Lances on the Charge, then Axes. I could see the Marines getting very confused.

OP, Is this a question?

There really is no other way to read it.

And about overwatch shenanigans, the burna rules clearly say that it can not be both a template weapon and a power weapon on the same turn. Power weapons can not shoot overwatch, template weapons can not be used in close combat.

I wanted to ask what do burnas count as when they become power weapons.

As power weapons with special rules.