WebDriverIO is a tool used for handling alerts and overlay modals in Selenium test automation, addressing the challenge of dealing with Javascript alerts that halt browser functions until resolved. The tutorial distinguishes between three alert types—alert pop-ups, confirmation alerts, and prompt pop-ups—each requiring specific methods for handling, such as acceptAlert(), dismissAlert(), getAlertText(), sendAlertText(), and isAlertOpen(). Unlike other frameworks requiring a switch to the alert, WebDriverIO allows direct interaction through the browser object, simplifying the automation process. Additionally, overlay modals, which differ from alerts as they can be closed by clicking outside the modal, are automated by directly selecting and interacting with elements using WebDriverIO selectors. This tutorial not only demonstrates how to manage these alerts and modals efficiently but also contrasts WebDriverIO's approach with other frameworks, highlighting its efficiency and simplicity.