After playing around a bit, I believe these are the rules; odd but consistant.
All drawn objects will be on top of all (+ menu) objects.
Within each type, the last object added will be on top.
So, as you draw stuff, the last thing drawn will be on top. As you add objects via the + menu, the last will be on top of previous + objects, but still under all drawn objects.
It's not ideal, but lacking actual layer controls (present in more sophisticated drawing apps), adding stuff on top of each other always takes bit of planning. I'm not sure why Apple chose this more complicated approach, instead of a simple last thing added is always on top, but it is what it is. I honestly don't use it much these days. Apple's built in tools are almost always enough to get what I want done; as long as I'm not feeling picky about how nice it looks.
If you want an app that offered a bit more flexibility and tools, you can try Annotable. It also lacks good layer controls, but whatever object you select last seems to end up on top. Of course, that can result in a whole different kind of nightmare.
It's been a while since I checked, but there are probably other markup tools out there. Most of them offer Photos extensions, so you can use them directly from the Photos app.