Pretty straightforward. If the actor position in world is Before the object then the actor renders in front.
This is done at camera level.
It prevents clipping.
It’s avaliable to any forward rendering engine as a base function.
Even in unreal I do believe.
It’s part of how the scene composting is done.
Think of it at the depth level.
You render the character in a separate depth.
You test the depth levels against the scene depth.
You adjust the image so that the actor’s hand can never clip into geometry and disappear.
Making stuff transprent is a hack.
Using a render target is a really bad hack.
Trying to use the depth buffer without compiling engine from source with heavy modifications is a hack.
Having the engine just do it properly.
In the render posses it already uses, without hacking it, like almost all solutions we have for Deferred.
That would be something wouldn’t it?
As far as how it works when objects are supposed to be “in front”:
99.9% of the time it really doesn’t matter.
This technique is generally used to prevent clipping issues in first person stuff.
You can’t see the pole between the camera and the player when you are in a first person view, can you?
Extending That to work correctly for third person too would also be really nice, but it is indeed more complex to deal, since it isn’t a situation you can just render everything on top of and be OK.
Also to answer this
I exist. In a world where Epic DGAF about quality assurance… 
@AntiGravity knows.