What is /overlay and how can I use it

I've came across a custom LEDE image in this repository, which contains a /overlay/mac80211/patches folder.
In this particular instance, it seems to me that this folder includes patches to a wireless driver that operates at the kernel level.

My questions are:

  • As far as I understand, these patches are applied at compilation time. How does the LEDE build system know to look into this folder to apply such patches? Is it a default behavior? Do I need to enable something?
  • Are the patches applied in numerical order? E.g., in the case presented above, that would be 53, then 54, ..., up to 59?
  • If I wanted a add a patch of my own to be applied at compilation time, can I simply add them to another folder, e.g. /overlay/foo/patches?