Hi there! No worries about asking, I'm happy to answer any questions.
Well, this hack doesn't change anything about the way you'd add new overworld palettes or the number of palettes you can access. The difference is that you don't have to worry about the palette slots anymore, because the hack loads your palettes dynamically. More specifically, it checks if a slot is unused before it writes the palette into it. If it is already in use, it checks the next slot, etc.
In vanilla, there are only two slots that load a sprite's palette when it's needed, 0 and 0xA. The remaining slots have the same standard palettes on all maps. So whenever you wanted a sprite with a custom palette, you'd have to choose between these two slots, meaning you could have at most two custom palettes at a time, unless you load one via ASM, but that would be cumbersome.
In summary, you could already add new palettes in the vanilla games, but you could only access two custom palettes at a time. This hack allows to have custom palettes in each of the 16 slots. I hope that cleared things up a little for you. ;)