Not doubting that, but what is the substantive difference here? Does the fact that there is a screen buffer on the Mac facilitate clipping that is otherwise not possible on the Alto?
He said they drew a lot of inspiration from Woz on the hardware side. Woz was well known for employing lots of little hacks to make things more efficient, and the Macintosh team had to apply the same approach to software.
My guess is it asks each application that overlapped those areas to redraw only those areas (in case the app is able to be smart about redrawing incrementally), and also clips the following redraw so that any draw operations issued by the app can be "culled". If an app isn't smart and just redraws everything, the clipping can still eliminate a lot of the draw calls.
The very characteristic horizontally stretched graphics of the Atari 2600 are due to this - the CPU was actually too slow, in a sense, for the electron beam which means your horizontal graphic elements had a fairly large minimum width - you couldn't change the output fast enough.
I strongly recommend:
https://en.wikipedia.org/wiki/Racing_the_Beam
... which goes into great detail on this topic and is one of my favorite books.
Per-pixel sorting while racing the beam is tricky, game consoles usually did it by limiting the number of objects (sprites) per-line, and fetching+caching them before the line is reached.