When weapons/ammo are being processed, the patcher looks up their keywords and searchers for a keyword match from weapons.json to decide what tier/type of weapon it should be converted to.

Materials and tiers are based off waccf progression. Pretty much every ranged weapon, ammunition, and projectile(if arrow/bolt) in your load order will get patched according to the criteria defined in this file.

The keywords are processed as follows: (See Weapons.json)

Shortbows and Light Crossbows: 
Tier 1:
WeapMaterialWood
Tier 2:
WeapMaterialDraugr
WAF_WeapMaterialForsworn 
WeapMaterialSilver 
WeapMaterialFalmer
WAF_MaterialChitin
Tier 3:
WeapMaterialElven
WAF_WeapNightingale
WeapMaterialGlass
Tier 4:
DLC1WeapMaterialDragonbone

Longbows and Heavy Crossbows:
Tier 1:
WeapMaterialIron
WeapMaterialSteel
Tier 2:
WeapMaterialImperial
WeapMaterialDwarven
WeapMaterialDraugrHoned
WeapMaterialFalmerHoned
Tier 3:
WeapMaterialOrcish
DLC2WeaponMaterialNordic
Tier 4:
WeapMaterialEbony
DLC2WeaponMaterialStalhrim
WeaponMaterialYollhrim
WeaponMaterialQolhrim
WeapMaterialDaedric

Every material type block has entries like this:
speed: X
stagger: X
sound: X
range_min:X
range_max: X
tier: X

speed: determines reload/draw speed
stagger: adds on to stagger duration if an attack staggers.
sound: This determines detection levels of attacks. Values are as follows: 2(0x02) = Silent, 1(0x01) = Normal, 0(0x00) = Loud, 3(0x03) = Very Loud.
range_min: Tells combat AI they don't need to be X units closer to a target to use the weapon   (500 for shortbows, 1000 for longbows example)
range_max: Tells combat AI they don't want to be more than X units from their target to use the weapon (3000 for shortbows, 6000 for long bows for example)
tier: This determines the intensity of weapon effects and also the speed of the projectile.

Overrides.json

There will be cases where the although the patcher classifies items correctly, some items will be improperly or incorrectly balanced based on lore, weapon descriptions, or just common sense.
Take forsworn bows for example.

Forsworn bows have the WAF_WeapMaterialForsworn keyword but the forsworn arrows have WeapMaterialWood. This would make forsworn bows tier 2, but their arrows tier 1. That does not match up. Therefore we can use the overrides file to correct it ourselves without waiting for the next waccf update.
We do this by going to the ammo->short section and adding an entry like this:
"ammo":{
"short":{
"ForswornArrow":2, <---- we added this
....
}
}
Now when the patcher encounters that arrow, it will ignore material keywords and assign it to the tier we specified.

Another example:

By default, the patcher will turn the vanilla Long Bow into a "Long shortbow" because it has the WeapMaterialWood keyword. That doesn't make any sense right? We correct it in overrides instead of hardcoding checks in the patcher. Under the weapons->long section we can add an entry with its editorId like:
  "long":{
   "LongBow":{
      speed":0.69,
      stagger":0.35,
      sound":0,
      range_min":1000,
      range_max":6000,
     "tier":1
} ...

Now The longbow will have custom stats that we defined instead of the stats defined by the WeapMaterialWood(shortbow T1). An override entry will ignore the material type stats and use whatver stats are defined here.