what did he mean by "it just stops jQuery selecting it again"?

This link provides a decent explanation of why we create and use a variable like $overlay rather than $(this), and I'm including the most relevant passage below.

Selector Caching in jQuery

"The worst offender is the way developers handle jQuery selectors. Most commonly, I see things like $( this ) repeated several times within a callback function. Or $( '#selector' ) used throughout a script to both bind and unbind multiple events.

What new developers don’t realize is that every call to $( something } asks jQuery to rescan for the matching element, wrap it in a jQuery object, and create a new instance of something you already have in memory. If your code crashes due to memory cascades, overuse of redundant selectors might be related"

Everytime we use a selector such $("p") or use $(this), jQuery is having to do more work to traverse the DOM and find what we're referring to. In particular if we're going to keep selecting the same thing over and over again throughout our code, this would hinder performance and be inefficient.

So, by caching our selectors as we've done with $overlay, we've stored this as a jQuery object that can be easily and quickly referenced to, is great for reusabililty, and means that jQuery does not have to perform more work of scanning through the DOM and finding our selector.

So when Andrew mentions "it stops jQuery selecting again", he's basically saying that jQuery is not having to perform the extra work in scanning through the DOM and finding the selector we refer to.

Another decent link below that provides a better answer to the benefits of selector caching:

Why Cache jQuery Objects