PS5 / Steam x-plau

Hey all just trying to get a answer on how x-play works. I have watched videos on youtube and quite frankly not sure how it will work via Ps5 with steam.

So when watching "Developer Diary: Redefining the Console Experience in Path of Exile 2" it shows clearly two people playing together which i assume is on one account but he mentions the second player will also be able to login with his char from his own account.

So if i have Poe2 on steam and the kid will have Poe2 on PS5 now lets say i wanna play my steam Char with the kid on Ps5 how does that work ?

Do i as a steam player need too link my account too a seperate Ps5 account or do i link it too his Ps5 account?
Or as seen in the videos that show's Co-op mode when selecting my char will it say login and a option will pop up and i have too type in my steam email address etc..

Or is it better just too buy a steam Account as main and link it too Ps5 so we can couch co-op but from what i have read i will still need too purchase a Ps5 poe2 EA/.

Cheers for the help