When deciding what is missing and needs copied over during a Sync operating, the tool uses what is called a Structure Equality Sync. 

This sync type ensures the file structure of your destination matches that of your source. It takes file path into consideration when performing the sync.

This means that if a file is found in both items A and B, but in different locations, it will still be copied to item B to match the file structure of item A. 

If a file/folder is copied to item B in order to match the structure, but in doing so produces a duplicate file, the icon to the left of it will indicate so, and the user can select it to show the file path of the duplicate item.