Given a commit to deploy, OSTree first allocates a directory for it. This is of the form /boot/loader/entries/ostree-osname-checksum.serial.conf. The serial is normally 0, but if a given commit is deployed more than once, it will be incremented. This is supported because the previous deployment may have configuration in /etc that we do not want to use or overwrite.

Now that we have a deployment directory, a 3-way merge is performed between the (by default) currently booted deployment's /etc, its default configuration, and the new deployment (based on its /usr/etc).