Conflict resolution logic is typically application specific so it would be hard to get something like this working in practice.
https://developer.apple.com/documentation/uikit/uidocumentst...
https://developer.apple.com/library/archive/technotes/tn2336...
Essentially there's an OS mechanism for getting the different versions of the file, your app can detect conflicts and choose how to resolve them, including by displaying arbitrary UI to the user. IIRC This UI can even be integrated with the file open dialog. As a last resort fallback if the app doesn't resolve it Finder/Files will let you keep either version or both (as separate files)
Like GP said - app specific. If I have two different versions of a SQLite database, that started from a common revision but were both updated independently, and want the updates that were applied in each of them to be preserved - there is quite a lot of work left to do after Apple throws their hands up.
But the OFA is about databases, and this thread is about syncing databases. So you agree with me: the Apple feature is worthless for this use case. GGP was right that its a lot of work to build sync with conflict resolution into an application, and its application specifc.
This obviously works better for very simple things like a "play history" and not for complex things like collaborative document writing.