When the output current increases, the voltage across R14 will also increase. This voltage is amplified by the cicuitry around opamp U1. The gain can be controlled by potmeter P1. When U1's output voltage exceeds 0.6V, T2 switches on. This causes a current flow in T1, which also switches on. The current flow in R3 switches on T5 and the voltage at the output terminals will drop to 0V. Of course, the current flow will also be 0A, and VR14 will also be 0V. However, T1 also feeds T2 via R1, so the output voltage remains 0V until switch SW1 is closed.
WARNING: remove the load prior to closing SW1. The overload protection does not work as long as SW1 is closed!
You may wonder why the voltage across R14 is first devided by R9 and R10 and then amplified by U1. In the the worst case scenario, the OUT terminal is shorted to the GND terminal. This means that the full output voltage will be across R14. This voltage can be up to 30V. However the supply voltage of U1 is just 15V. If the non-inverting pin were directly connected to the GND terminal, opamp U1 would be destroyed, because the input voltage of an opamp should never exceed its supply voltage. R9 and R10 make sure that Vp never exceeds 15V.
Capacitor C1 prevents current spikes triggering the overload protector.