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Firstly I'd like to point out that I am a very basic user and trying to get my head around a few things.

I have a KML boundary saved from Google Earth. I can then drop this boundary in to QGIS which shows up with CRS of EPSG:4326. I can then open the Google satellite imagery and this confirms that my boundary is in the correct position.

So now I have 2 layers, my boundary in EPSG:4326 and the Google Satellite which shows CRS EPSG:3857.

How are they aligned perfectly if they are on a different CRS?

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    They aren't, but they're drawn that way (because they have correct metadata). This is the contrapositive of the usual new-to-projections question "If I change the metadata to lie about the actual projection so they're the same, why don't they don't align anymore?"
    – Vince
    Commented May 19, 2022 at 3:33

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As mentioned in the documentation:

By default, QGIS reprojects data “on the fly”. What this means is that even if the data itself is in another CRS, QGIS can project it as if it were in a CRS of your choice.

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