The Compositing Mode button determines how the transparency in a video track is generated.

The Compositing Mode button determines how the transparency in a video track is generated.
The key to understanding overlays, masks, transparency, and compositing is to understand the parent/child relationship between tracks.
Compositing is the process of mixing video tracks to create a single layered output.
You can use compositing in conjunction with masks to cover portions of video or to limit the effects of a filter. Masks are frequently based on dark versus light areas, specific colors, or an alpha channel.
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