I would think it would go to the Test1 Layer.
Now it's getting interesting (more complicated, but interesting).
What happens when you pick something (the only thing) on layer "test" -i.e. items would get moved to layer "test1" but then the layer "test" would be empty. Does that layer get deleted or just renamed or even moved to the "test1" layer? Also, what mechanism would you use to move items from "test1" back to "test"? And, do you support a selection set for input?
Just curious but why would you need something like this?
My point behind the question; this program has a very high chance of being a big pain to code and on the operation (iteration upon iteration of the layer table--over and over again--[as in the case of the selection set] for something not really necessary).