Campaign priorities determine your bids according to which rule:
the highest priority campaign will bid, unless a lower priority bid is high enough
if the highest priority campaign is out of budget, the lower priority campaign bids
if the highest priority campaign is out of budget, lower priority budget is added to bids
if you have multiple campaigns with the same bid, the lowest necessary bid will be used
Explanation:
If the highest priority campaign is out of budget, the lower priority campaign bids.
If the campaign with the highest priority runs out of budget, the next lower priority campaign will place the bid. Continuing with the previous example, when the budget for the High priority campaign is used up, the bid from the Medium priority campaign will be used.
Read more here: https://support.google.com/adwords/answer/6275296