In Ca1−xRxFeAs2 (R = rare earth), an antiferromagnetic (AFM) phase as well as a structural transition have been reported, even in the electron-overdoped regime. Here, we investigated the temperature-dependent in-plane optical spectroscopy of overdoped Ca0.77Nd0.23FeAs2. Upon entering the AFM state, we found an abrupt reduction of low-frequency (500–2000 cm−1) spectral weight in the optical conductivity. In sharp contrast to the parent compounds of the 122 system, where spin-density-wave gaps have been clearly observed in the AFM state, a gap signature is absent in Ca0.77Nd0.23FeAs2. This may be a consequence of the poor nesting condition between the hole and electron pockets. However, a spectral weight analysis shows that the reduced spectral weight at low frequency is transferred to the high-frequency range (4000 cm−1), pointing to a localization effect. These observations suggest that the AFM order in Ca0.77Nd0.23FeAs2 is most likely to originate from a localized nature rather than Fermi-surface nesting.