Layer 2 Bridging
Discussions center on achieving Layer 2 connectivity using bridge interfaces, VXLAN, VLANs, and related techniques as alternatives to routing or NAT, especially for VMs, containers, and VPNs.
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I'd guess they are using VXLAN or another similar technology.
Does this get you Layer 2 connectivity?
Whatever you're doing can probably be done faster and simpler with bridge interfaces.
narus-networks has solved this 'problem' long time ago...
Zerotier can do L2 with some of the same limitations (userspace, perf)
Can't you just use VLAN tagging and firewall rules?
You would need a large L2 network to support it, or you'd have to route it at L3, which is not trivial.
Why even use routing instead of switching (bridging network interfaces)?
I'm guessing, but I would say it has something to do with the fact they're using a VPN: you may want to route packets between your physical and virtual interface.
Why two VLAN's? Are you worried the traffic is analyzed by the ISP locally?