How to use the overlay feature
To be able to use the photo overlay feature, you will have to take your photos from within the app. If you haven't already, you will need to give the app permission to access your device's camera, here's instructions on how to do that: https://support.apple.com/guide/iphone/control-access-to-hardware-features-iph168c4bbd5/ios
Then, to use the overlay feature, simply tap on Show Last Photo when taking a new photo.