Difference between Priority in the Positioning dialog and Z-Index in the Rendering dialog in QGIS

Question

I studying the layer labeling options in QGIS and encountered two options which seem to be the same. If I understand the QGIS documentation correctly, the option "priority" within "Positioning" determines which label to render when there are two Labels overlaping.

The Z-Index Option in "Rendering" seems to be doing the same.

What is the difference between these two options?

Answer 1

The "priority" option tells which label will be displayed if two labels overlap but if you set the option to render all labels (even overlapping labels), the Z index option lets you choose which one will be on top and will be more likely to be readable.