Is /Applications a regular folder like any other or is it some kind of werewolf overlay of multiple folders which only appears to be a regular folder? How is this called and where is it documented?
The Macintosh HD volume is actually two separate volumes. One is the "Signed System Volume", which is a read-only, secure volume containing the OS. This includes Apple-created apps that are bundled with the OS, like Preview, TextEdit, etc.
The other volume is called "Macintosh HD - Data", and contains all your stuff: your apps, your user accounts, temp files, /usr/local
, and so on.
The OSFinder does indeed portray these two volumes as one merged volume, so that you see your third-party installed apps in the same folder as TextEdit, even though they are separate.
The advantage of the split is that the OS is entirely untouched by user activity. So, to do a 'clean install', you no longer need to erase the OS and reinstall it: you can just wipe the Data volume, and you have a 'factory' state disk. If the OS volume is altered, then it won't boot and must be reinstalled.