Vertical callback or per pixel callback : I understand/How does Tilengine work?

[System64]

There are four passes, on each pass only effective items for that pass are drawn.

So the first pass of sprites only renders regular sprites, and the second pass only renders priority ones. The same for tiles: first pass draws regular tiles, second pass draws priority tiles. Items drawn last overdraw the ones drawn fist, so this is how priority is achieved.

Oh, that makes sense now.
So if I understand well, you first draw all layers with normal tiles, then you draw the normal sprites, then you draws all layers again but priority tiles only, and then you draw priority sprites?