Quote: "so that means...the application should be designed in a way that it automatically copies that particular *.bin file to the user created overlay folder?"
No, it means if the BIN file does not exist, then the program will create it when loading your map.
So, don't worry about them, unless you want to delete it.
That way, you know the new one created by the program would reflect the changes you made and your edit will function properly.
NOTE: There is an option to delete ALL of your DBO and BIN files when you update the editor.
Its best to get rid of them after any changes made and let the program create new ones.
So bottom line is ...
DELETE the BIN and DBO files. DO NOT Copy them.