Load the kernel module:

modprobe v4l2loopback devices=1 video_nr=10 card_label="Constatus cam" exclusive_caps=1

Install Constatus from https://github.com/folkertvanheusden/constatus

Create a configuration file that can contain something like:

views = (
    {
            id = "view-3";      
            type = "pip";
            descr = "pip";
            width = 1280;
            height = 720;
            sources = ( { id="1-1"; }, { id="1b-1"; position="upper-left"; perc=25; }, { id="2-1"; position="upper-right"; perc=25; }, { id="1c-1"; position="center-left"; perc=20; } )
            video-loopback = {
                    device = "/dev/video7";
                    pixel-format = "YUYV";
                    fps = 25.0;
                    filters = (
                    )
            };
})

There are other ways of incorporating video4linux loopback with Constatus. See the examples/ directory and/or the example constatus.cfg.