In iOS you can use your physical SIM plus eSIM at the same time. You can have up to eight eSIMs at a time.
Think of each SIM/eSIM as a cellular account added to your phone. iOS allows you to individually turn accounts on or off within the "Cellular" section of your Settings app. You can also choose which account is your default voice line, and select which to use for data. Your iPhone can also use multiple accounts for data, in which case the system will switch automatically between accounts depending on reception and availability.
Apple has a support page going into more detail here.