What is “modloop” option in Alpine?

I'm trying to understand what is the difference of making Alpine installation medium as read-only type (LiveCD) and as a standard disk mode (where the OS state can be saved). I've seen the modloop option when the author of this article (https://wiki.alpinelinux.org/wiki/Create_UEFI_boot_USB) configured loader entries for UEFI boot mode:

Contents of loader/entries/alpine.conf
title    Alpine Linux
linux    /boot/vmlinuz-hardened
initrd   /boot/initramfs-hardened
options  modloop=/boot/modloop-hardened modules=loop,squashfs,sd-mod,usb-storage quiet