When Google released the Android 10 beta earlier this year, it introduced the bubbles notification feature. Bubbles are built into the notification system and are used as an alternative to using the SYSTEM_ALERT_WINDOW. Notifications are presented on top of the app in use when the bubble feature is enabled.
Bubbles was not included in the stable Android 10 release. The Bubbles API remains in development, and developers can currently manually enable the API. According to Pranob Mehrotra of XDA Developers, Google is encouraging developers to test out the API so it can displace the use of the overlay API. Mehrotra further speculated that Google anticipates releasing the Bubbles feature with the Android 11 release.
Bubbles can be expanded to reveal app functionality and information. Further, it can be collapsed when not used. When a device is locked, bubbles appear as any notification appears. Bubbles is an opt-out feature. When an app presents the first bubble, permission dialog is shown that requires users to block bubbles or allow bubbles. Check out the API docs to learn more.