Elements promoted to the top layer stack according to the order they are promoted. Inside a promoted element, child elements are stacked according to the regular layout rules, i.e. same as if the element wasn't promoted.
Think of the "top layer" as similar to inserting an element as the last child of the document body. This is how modals and overlays are usually implemented - by inserting the element last (and position it absolutely) it will automatically stack higher than anything else in the document. At least until something else is inserted last.
Z-index is actually not that useful for stacking elements (whether in top layer or not) since it only works inside the scope of a stacking context. Element order is a better way to control stacking.
Think of the "top layer" as similar to inserting an element as the last child of the document body. This is how modals and overlays are usually implemented - by inserting the element last (and position it absolutely) it will automatically stack higher than anything else in the document. At least until something else is inserted last.
Z-index is actually not that useful for stacking elements (whether in top layer or not) since it only works inside the scope of a stacking context. Element order is a better way to control stacking.