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: