No, it’s behind… You have your background image for the panel, then instruments are placed over that. If you’re dealing with an analog cockpit or using just AM instruments, this if fine.
However, when dealing with popout instruments from the sim, those sit BEHIND the entire AM panel, not on top. That requires holes being cut into the background image (alpha transparency) so that the popouts will show through.
Keep in mind that with the demo, you can only use the demo panel, which is a basic 6-pack of gauges. You can’t load any other instruments nor import any custom instruments.