Layer 0 is a default AutoCAD layer.

When you want to create geometry for blocks, this is

default layer for it. When you insert AutoCAD blocks, they will use active layer. Every
objects in block that use Layer 0 will use the block layer properties.

When you define object properties (color, line weight, etc) to ByLayer, all of it properties
will use the same properties as its defined in the layers properties.

When you create geometries in your AutoCAD block using ByBlock, then you can
override its properties after the block has been placed.

When you create geometries in your AutoCAD block other than ByLayer or ByBlock,
then you cant override them after your block has been placed.

http://www.cad-notes.com/layer-0-bylayer-and-byblock/