"Picking" in construct is the term used for specifying which objects you are going to apply an action to.
All of them, or specific ones etc.
if you were to say:
On start of layout -> Player destroy
it would destroy all Players in the game
but if you were to say
on start of layout
Pick by evaluate, Player.name = "hero" -> Destory
it would only destory the player who's instance variable "name" is "Hero"
so with your overlapping example.
First you need to determine which objects are overlapping
Player on collision with another object (object 2)
(sub event) pick Top/Bottom -> Actions
Once the two objects overlap -> you use the "pick top/bottom" to pick which object specifically you want to do the actions to. Either the top or bottom object.
On collision with another object is a form of picking a specific object
just like "pick by evaluate", or pick nearest/farthest etc