What temp are you cold dry hopping guys doing it at? Ive has always been under 38 degrees. Maybe that has something to do with it.
Also, I've heard other commercial brewers say the same thing thing (veg flavors at cold temps) so there is some heavy hitters saying this. That doesn't mean anyone is right or wrong but I question why it works or is opposite for some and not others.
Also, when I say "veg" flavors I'm talking more "herbal" like aromas and flavors. Not so much grassy, though that could be one descriptor.
Right before I transfer, I drop them in the keg and purge. After filling the keg, I purge again and immediately move to the kegorator (45-50F).
I'll start sampling after 3 days or so and pull at the first sign of over-extracted flavor. Total contact time is anywhere from 1-3 weeks, depending on volume/type of beer and amount of hops. Bigger beers get a second, smaller shot of dry hops.
To me, over-extracted hop flavors/aromas are:
"Grassy" - not-so-freshly cut grass (kind of like the inside of a lawn mower bag) as opposed to fresh-cut grass
"Vegetal" - Wilty spinach, overcooked greens
Butter/Diacetyl? - I've always thought this was over-extraction, but I've heard Kara Taylor (White Labs) gave a MBAA presentation on diacetyl formation from yeast due to dry hopping. Would love to read it.
I also think over-extraction of hops (or any herb/spice, for that matter) add astringency