Use the Comp Timeline FX to control the composition of a segment with the input on the track beneath it. By default, the currently selected segment is used as the foreground of the composition, and the layer underneath is used as the background; however these inputs can be swapped. The type of composition is determined by the blending mode and the level of transparency of the foreground input.
By default, the Comp Timeline FX button is unmuted: compositing is active and, by default, the foreground and background mattes are on. When muted, only the RGB clip is displayed.