How does the temperature overlay work?

How does the temperature overlay work? - Black and Red Electric Device

I've read about the temperature overlay in Kerbal Space Program here. And I've seen it, but how does it work?

When I turned it on f11, everything was red, which seems bad.

I've seen the temperature gauges come up during re-entry, which makes sense.

Kerbal Space Program re-entry heating overlay

Also, I've seen it come up with temperature gauges while flying in space with engines that weren't overheating (according to the staging list on the left). Why was that?

There's nothing in the tutorials or online. What is going on with the temperature gauges and heating overlay?






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