As with ordinary watercolor paint or pencil that is not water soluble, you can use as many layers as you wish. You just continue working. That said, too many colors and you risk creating a color that looks like mud rather than anything else.
The extent to which the colors mix depends on how hard you scrub with the brush at the pigment you've applied to the paper. If you go back and forth, back and forth, you'll dissolve all the pigment. If you just go lightly over the top, you will only dissolve the very top.
If you're working on a textured paper, you can use this property of watersoluble pencil or crayon to creature texture or a granulated effect as shown in the photo above.
