The “physics” layer property used in conjunction with mte.enableBox2DPhysics(1) allows you to specify which layers run the physics objects and tiles you put on them. So, for example, you could give a platform tile physics properties, place it both in the foreground and in the background, and by only giving the foreground the “physics” layer property only have the tiles in the foreground generate physics bodies. It’s a convenience feature allowing you to use tiles as physics and non-physics tiles depending on the layer.
Only tiles with the “physics” tile property will load as physics objects. If you don’t specify any other properties the physics body will be static, rectangular, and the size of the tile.