Obsidian 1.9.10 added an option to create a conflict file instead of trying to merge (Settings > Sync > Conflict resolution), but the lack of notification outside the log is a problem with both setups. Manually checking the log all the time (in a multi step process) to make sure my files haven’t been corrupted or split into multiple versions is a bad experience. (I’ve bookmarked a search for file:"conflicted copy", which is easier to check, but having to check manually is still bad). A notification would let me deal with the problem promptly.
And the notification should be the kind you have to manually dismiss, not the kind that disappears automatically.