On conflict, it would remove the conflicting file and instead create two versions with suffixes either like annexed files or better the commit hash and/or date.
Submodule conflicts can't be resolved like this, in that case I would use the most recent commit of the two in question.
+
+> [[rejected|done]] --[[Joey]]
--- /dev/null
+[[!comment format=mdwn
+ username="joey"
+ subject="""comment 1"""
+ date="2023-06-05T18:49:43Z"
+ content="""
+I think this would violate least surprise. Users expect git-annex
+to behave like git, and that means merge conflicts like git handles them,
+when the files are text files tracked by git.
+
+Consider that, if the file is a config file, applying git-annex's
+resolvemerge to it would make 2 files with different names be in the
+repository. So the config file would stop taking effect for whatever it was
+supposed to configure. It would be easy for the user to miss that, because
+the repository would not be left in a conflicted state.
+
+When you check a file into git rather than git-annex, you are
+choosing to have git manage that file normally. If you want the git-annex
+behavior, you can check the file into git-annex.
+"""]]