Transcoding during ffmpeg overlay My question is related to the technicality behind video overlaying. When a 3D object or an image is added to a video sequence as an overlay to render, does ffmpeg fully decode the original sequence to a raw file, then mix the object or image to the desired position and re-encode back to the desired format?. 
I'd like to know if this is the process followed by the industry to mix 3D objects, images or other material with generic video contents. Or is there another approach to perform this task.
Your assistance is highly appreciated.
Thanks.
From FFmpeg Documentation – Detailed Description:


  ffmpeg calls the libavformat library (containing demuxers) to
  read input files and get packets containing encoded data from them.
  When there are multiple input files, ffmpeg tries to keep them
  synchronized by tracking lowest timestamp on any active input stream.
  
  Encoded packets are then passed to the decoder (unless stream
  copy is selected for the stream). The decoder produces
  uncompressed frames (raw video/PCM audio) which can be processed
  further by filtering. After filtering, the frames are passed to
  the encoder, which encodes them and outputs encoded packets.
  Finally those are passed to the muxer, which writes the encoded
  packets to the output file.