it is very useful (and for me, common) to put protocol witnesses in an overlay module, to help keep binary size down and improve compilation speed. otherwise, the witnesses have to go either in the module that defines the type, or the module that defines the protocol, and would introduce unwanted dependencies between the two.
i have reservations about making SwiftPM packages an organizational unit for anything, given that SwiftPM only supports one package per repository, which means in practice a “package” (which may contain hundreds of modules) is far too large of a unit. but i already talked about that during the review of the package access level, and it really doesn’t have much to do with how the compiler supports package, rather it is more an issue with how SwiftPM defines “packages” in its implementation.