Layer load balancing operates at the transport layer. The load balancer sees IP addresses and TCP/UDP ports but not the actual request content.
When a TCP connection arrives, the load balancer picks a backend server based on source IP, destination port, or simple rotation. It then forwards all packets for that connection to the chosen server.
Layer is fast because there's no packet inspection. The load balancer doesn't decrypt TLS or parse HTTP. It just shuffles packets. This speed comes at the cost of flexibility.