The assembler laid out the code within the sections and generally it's not changed after that (except for targets that do linker relaxation). However with -ffunction-sections the compiler would put each function in its own section which then can be independently relocated.

Sounds like Amiga HUNK format with the HUNK_OVERLAY hunk. For instance various functions could be loaded anywhere in memory.

The kernel needs a bit more information than that, since chunks of code can refer to each other and if you rearrange them this would break these since they're typically emitted as relative offsets.