What happens if you add a new item on two devices simultaneously?

It renames one of them to $hostname_conflicted, or something like that. Keepass has a built in tool for reconciling two databases, you can use that in this scenario.

Why would you do that?

By the way, syncthing can manage conflicts by keeping one copy of the file with a specific name and date. You can also decide is one host is the source of truth.