Exactly. It means incompatible changes have to be merged manually later. It causes problems with large reports where, for example, an electrical engineer may be editing one section and a civil engineer another, but only one can have the document checked out at a time. It's possible to break large reports up into many small section reports, but that's a workaround to the real issue.

It also means that when someone checks a file out and then goes home for the weekend without checking it back in no one can update the file in the DMS without administrator support.