They are indeed bind-mounted separately in the chroot on top of the local file system: https://github.com/Overv/outrun/blob/1e86c429c60022421de68f2...
Actually looking at the (very good!) readme, I'm thinking that the most interesting part is the custom file system.
I've been looking for the "perfect" networked filesystem, and this is the first new effort I've seen that seems to check most boxes (not disconnected operation though, but that is tall order..).
The only other contender I'm aware of is coda: https://github.com/cmusatyalab/coda
And maybe openAfs: https://www.openafs.org/
But I never did get around to play much with either.
Maybe it's time for someone to build another system on top of foundationdb?