At the very worse case (NAT hell or something else) they may use a DERP relay. But if you have a cooperative connection or plain local connection it works fine.
There's encryption overhead though, I can't saturate a 1Gbps over Tailscale on M1, while direct connection works (iperf3).
Tailscale looks nice. I acknowledge there is a lot of room for NAT traversal and alike tools. I am quite curious how do you manage network settings across your network. This could have served me well 10 yrs ago.
> Taildrop is currently limited to sending files between your own personal devices. You cannot send files to devices owned by other users even on the same Tailscale network.
[1] https://tailscale.com/kb/1106/taildrop