Technical sources

Perhaps the most convincing way to find out how X-Plane mesh works, is just test it for your self. I did.
But it is always good to check other sources as well.

Mesh overwrites everything below

These sources explain that the base mesh overwrites anything below it:

From: http://www.alpilotx.net/downloads/x-plane-11-hd-mesh-scenery-v4/

From: https://www.avsim.com/forums/topic/442579-understanding-scenery-order/

Only 1 mesh file will be loaded per tile

These sources specifically explain that only 1 mesh will be loaded:

From: https://developer.x-plane.com/manuals/wed/#appendix:anatomyofthex-planescenerysystem

From: http://www.alpilotx.net/faq/modifying-the-mesh-for-your-own-projects/

If you would like to know more about the X-Plane file formats and DSF files in general please check these links: