The second thing would be logicals and overlayed directories. They worked like a stack of transparencies like the human anatomy entry in an encyclopedia. The base layer would be a read only version of the operating system. Above that would be a writable layer. Above that, for development users, would be test versions of new OS elements. Regular users wouldn't see these layers. Above that would be applications (read only) with a writeable layer above it.
The purpose of the writeable layer over the read only layer is to trap attempts to overwrite system files.