How does the Encumbrance and Clothes re-layering work?

I never understood the help menu in the game about the Encumbrance and the Re-layering mechanic.
Can someone please explain what value means what in the Encumbrance menu and what values should I look for? And why is armor re-layering important?

Thank You in advace! This will help me and many other new players!

Re-layering changes which item get damaged first. When two items protect the same body part, the one lower on the list will get hit first and thus is more likely to get damaged. This doesn’t mean items at the top are 100% safe - some damage can get through and damage your underwear and such.

Which is really awesome when you’re wearing a 100% coverage helmet with very good resistance against say, bullets, and the 9mm round from a turret phases through it and rolls for damage against your balaclava underneath.

Stupid turrets and their stupid magical boolets.