It is primarily added over the top of the glass layup.
With peal-ply in place, capillary action draws resin up and out of the lay-up which will result in all of the weave of the the top layer of glass cloth being fully saturated with resin. Without the peal-ply, the top layer would not be fully saturated and there would be a lot of the weave texture showing (that would have to be either sanded off or further filled with resin).
The peal-ply is pulled off once the resin has fully cured.
The secondary benefit to using the peal-ply is it results in a surface that is fully ready (no other sanding or prep. necessary) for adding more glass layers or coats of resin if needed.