All of the dry measures of the issaron (one-tenth of an ephah), the Beit HaMikdash (the Temple), were heaped. That means they contained the proper amount of flour not only by filling the utensil to the brim, but also by having it overflow on top, a little bit like a hill, right on top of the keli (utensil). Except for the measure of the Kohen Gadol (High Priest), who would use the measurement to come up with the flour for the Minchat Chavitin (the High Priest's daily meal offering) that he would offer every single morning and every single afternoon. In this case, the heap was already contained within the keli: the full issaron of flour was level with the top of the utensil.
We'll now talk about the overflow, the liquid or the solid that rises above the rim of the Minchat Chavitin measuring utensil. Whatever is on top in terms of the liquid measures is sanctified. The rims of the liquid measures are sanctified themselves when they were consecrated by having Shemen HaMishchah (anointing oil) poured onto them originally. So not only are the insides consecrated and holy, but the tops are as well. So any overflow floating right on top of the keli is considered to be sanctified. But the overbrim—whatever is overflowing—is not sanctified when we're talking about dry measures, because only the inside of the dry measures was consecrated, not the tops. That's the opinion of Tanna Kama (the first tanna).
A different reason why the overflow of the liquid measures is sanctified and the dry measures are not is that the liquid measures are consecrated. Therefore, the overbrim is sanctified because it becomes consecrated automatically by the vessel. But the dry measures were not consecrated. Therefore, the overbrim is not sanctified. What Rabbi Akiva is basically saying is that he disagrees with the opinion of Tanna Kama. He says that when it came to the yavesh (dry) utensils, they weren't sanctified whatsoever. The owner of the flour had the intention to sanctify the flour, but the measures that held it weren't sanctified at all. So the owner of the Mincha (meal offering) never had the intention to sanctify the flour on top of it. He only wanted to sanctify what was needed for the offering. But whatever was on top, it was never as Kavanah (intention). And it doesn't become sanctified with the utensil because the utensil itself isn't sanctified. When it comes to the lach (liquid), the utensil is sanctified. So anything that goes in it, on top of it, becomes sanctified as well. That's the rationale of Rabbi Akiva.
Rabbi Yosei gives another reason. Rabbi Yosei says, “No, it's not because of the above reason—that when it came to liquid measures, they were sanctified, and dry measures, they were not.” When it comes to the liquid that's added to a utensil, it becomes mixed with the liquid that's already there. All the oil and the wine that ends up on the rim of the utensil was within the vessel, and is therefore sanctified. What he's saying over here is basically that liquid is in constant movement. Even though right now the liquid on top of the brim is certain drops, those drops are in constant movement. At some point they were within the keli, and the drops that are there keep moving and switching and this and that. And therefore, since they were in the keli, they're sanctified. The fact that they're on top doesn't mean anything. It's only because they went inside the keli that they become sanctified.
Lach v'yavesh (liquid and dry): when we're talking about a dry substance that's added to the utensil, that does not become mixed with the dry substance that's already inside of it. Flour that's on top stays on top and doesn't ever go inside. So therefore, whatever's above that measuring utensil is not sanctified. And that's the difference between lach and yavesh, according to Rabbi Yosei.