I’ve placed my background/overlay that’s not approved yet and it works. Episode says it when you submit it as well.
On Computer that is, If you click on the line that has your unsubmitted background/overlay it will show, but if you’re trying to play the whole scene it won’t work.
On Mobile, It’ll completely cut out the scene and jump to the next scene without the overlay/background.
But I’ve never gotten that coded message when I click preview.