During which scenario is an application overlay most commonly used?

An application overlay is most commonly used to accommodate system rule changes. This practice allows developers and business analysts to make adjustments to the application without impacting the existing configuration or running code. It's particularly useful in environments where rules and configurations are frequently updated or tweaked to better align with business requirements and operational needs.

By using an overlay, changes can be seamlessly integrated into the existing application framework, preserving the underlying system's integrity while ensuring that users have access to the most current functionalities. This method mitigates the risks associated with direct modifications to the core application, which could lead to compatibility issues, especially in large-scale deployments.

In contrast, while testing new application features, migrating to a new software version, or generating reports for compliance, the application overlay may not provide the same level of benefit. Each of these scenarios typically involves different strategies and methodologies that focus more on feature validation, version control, or data extraction rather than on rule management and application configurability.