If, during installation, a file or symlink exists in the target tree and has the same name as something Stow needs to create, and if the existing name is not a folded tree that can be split open, then a conflict has arisen. A conflict also occurs if a directory exists where Stow needs to place a symlink to a non-directory. On the other hand, if the existing name is merely a symlink that already points where Stow needs it to, then no conflict has occurred. (Thus it is harmless to install a package that has already been installed.)
For complex packages, scanning the stow and target trees in tandem, and deciding whether to make directories or links, split-open or fold directories, can actually take a long time (a number of seconds). Moreover, an accurate analysis of potential conflicts requires us to take into account all of these operations.
Since version 2.0, Stow now adopts a two-phase algorithm, first scanning for any potential conflicts before any stowing or unstowing operations are performed. If any conflicts are found, they are displayed and then Stow terminates without making any modifications to the filesystem. This means that there is much less risk of a package being partially stowed or unstowed due to conflicts.
Prior to version 2.0, if a conflict was discovered, the stow or unstow operation could be aborted mid-flow, leaving the target tree in an inconsistent state.