The layer editor is a docking window like most of the other editor type windows. It can be positioned in any fashion typical of a docking style window. IF it is not visible it can be enabled under the View menu in the sequence editor. The menu name is “Mixing Filter Editor Window” in 3.3. This name was a testing name and was overlooked prior to the release. It will be renamed to Layer Editor Window post 3.3.
Layers are stacked in the editor by there order of precedence. Layers on top will be processed first, working down to the default layer at the bottom. The Default layer is fixed and will always be at the bottom. No mixing occurs in this layer.
Buttons at the top allow new layers to be added, or selected layers to be deleted. If any effects are associated with a layer when it is deleted, all those effects will be automatically moved to the default layer.
Layers can be reordered by dragging them in the list to the position you want them to be in. Expanding the layer provides a way to name the layer as desired. The drop down box allows you to choose the mixer used to combine color between this layer and the layer below it.
As you work on your sequence, you may find that you need multiple sets of layers in different orders to accomplish what you need. Keep in mind that layers and their order are applied across the entire sequence.