What problem does this address?

Overlapping elements is an interesting and recurring design choice that adds an extra layer of refinement not only to theme designs and patterns, but it is also used across many websites. I believe that currently there isn't such feature in Gutenberg, unless we use custom code or plugins.

What is your proposed solution?

It would be great if there was an "overlap" option we could set to blocks such as Images, Post Featured Image, Galleries, Cover and Query Blocks.

The Twenty Twenty One default theme actually included the option that I have in mind to its patterns:

Here are a few ideas we've tried while iterating and found this could be a really useful tool: