'Faves' are the uploads you have marked in your Library as Favorite. Mark an upload as 'fave' by clicking the star icon beneath the file. You can use faved uploads in multiple lessons with the faves panel.
Click on 'Library' at top of your teacher page. Fave an upload by clicking the star icon.
When something is faved, it's added to the faves panel. It can then be added to a lesson by clicking "Add Fave".
Click "Add to Lesson",
and the file is added to the lesson.