It uses the same invisible alpha channel technology that the ACG uses. You assign the VFX or animation to whatever you want it to effect, and that’s all it effects and it won’t react with anything else in the scene or stage. Make nearly opaque holograms in daylight, boost the output of tiny projectors and project on black. You have to see it in action to understand it’s impact.
The best way to describe it is it’s a paint on television screen.