Right now in order to make a simple tree we have to cut the trunk and leaves into two separate objects. The bottom section usually is on the same layer as the ground while the top is a layer above. This is done so when a player walks behind the tree, the tree is drawn above him.
This is somewhat acceptable for large objects, but with small ones which don't need to be split there exists a problem.
On the top left corner you have the player standing one tile above a box. Since his layer is higher than the box, his foot is drawn on top of it. This is a side-effect of the bottom left panel where the player's layer is set high so his head doesn't slide under the box.
If there were some sort of vertical layer variable, you would see something more like what's in the top right panel. Even though the player is a layer above the box, the box knows to be drawn over him because it is below him. When the player is a tile below the object, the default behavior continues.
