Library Overrides is the new system designed to replace and supersede Proxies. Most types of linked data-blocks can be overridden, and the properties of those overrides can then be edited. When the library data changes, unmodified properties of the overridden one will be updated accordingly.
It is considered as experimental, and the current proxy system will be kept alongside for a few releases. Automatic conversion from proxies to library overrides is not planned, there will be a manual operator to do that, but results on complex characters are not guaranteed.
Compared to proxies, library overrides support:
Multiple independent overrides of a same linked data (e.g. a whole character).
Adding new modifiers and constraints, anywhere in the stack.
Recursively chaining overrides (i.e. link and override overrides from another library file, etc.).
Creating an Override¶
There are two ways to create an override of a linked data-block.
Single Data-Block Override¶
You can override a single data-block from two places:
The Outliner (it's in the context menu of IDs), in which case all local usages of that linked ID will be remapped to the new local override.
The data-block menu in the UI (Shift-LMB on the chain icon to the right), in which case only that specific usage will be remapped to the new local override.
This one operates in the 3D Viewport, over linked objects or local empties instantiating a linked collection (typically, a linked character). It is very similar to the Make Proxy operator, and is found in the same submenu.
Unlike the method described above, it will go through the whole hierarchy of collections and objects, and override all those needed to allow posing/animation of a character.
Proper Collections Layout Matters
For this operator to work properly, it is crucial that all the collections needed by the character are children of the root (linked and instantiated) one. Otherwise, some won't be automatically overridden, and manual work will be needed to fix the override.
Converting Proxies to Library Override¶
Converts older a Proxy to a local override. This operator is used to help convert older blend-files to the new override system. In the future, this conversion will likely happen automatically.
Editing an Override¶
Essentially, an override is edited the same way as a regular local data-block. You can use operators on them, edit their properties from various editors, etc.
There are some limitations however, most notably Edit Mode is not allowed currently for overrides.
In most cases, as soon as you edit a property, you can see that it's overridden by its teal blue outline/background (like the yellow/green/purple colors of animated/driven ones).
You can also animate overrides, animated properties just replace/supersede overrides then. Note that you cannot override-edit an existing animation, you'll have to create a new action.
You can manually define or remove an override from the context menu of the relevant property.