This effect is created with the help of Smart Object Layers. In order to edit the file, you need to place your graphics in Smart Layer called "Edit Content" (marked with green). 

To do so, double-click the layer's thumbnail (the layer's little rectangular image, but not the layer itself). It'll trigger the new tab. Delete the "Delete Me" layer, then type your own text in the layer, that's left. 

Don't forget to hit Cmd+S (or Ctrl+S) to save the applied changes. Then close the Smart Layer and watch the effect being applied in the main tab!

Thanks, 
Pixelbuddha & DesignSquad