Overlayfs as a solution to copying central file systems everywhere. In what way?

I have searched the whole internet and have watched my lecture multiple times just to understand one thing: I still can't quite understand, how is overlayFS a solution to copying the central FS for each user? Is the lowerdir set to be the root directory? Or do we create an alternative rootfs and use it everywhere as a lowerdir for each new filesystem for each user? I apologize but there's some understanding gap. I don't understand in what way are we saving storage, and if someone could just put it in simple terms, it would be wonderful. Thank you!