Based on my understanding of what @Calinou said, they are shader based and not dependent on the mesh, but instead the material.
My guess is that it’s similar to deferred rendering and the separate passes, where you can draw/render directly on top of existing materials. It is kinda like it’s drawn in another layer in Photoshop or Gimp, it draws on top of the result from the render and then adds the decals after that.
This has a lot of advantages with visuals, as essentially it doesn’t have to know anything the mesh underneath and instead only the finished render, avoiding things like decal stretching and projection issues. I think it’s more complex to implement due to the lighting and normal passes, as well as making sure it looks correct at extreme angles, but it probably gets the required rendering information from Godot to avoid or minimize these issues.
That said, that is just my hunch on how it works. It will be interesting to use them, look at the code, and see how it works.
(Side note: In my prior post, I meant “projected onto the materials” not “projected onto the decals” :sweat_smile: )