Updating this thread with further work with @pascal on this late last year although to this point the problem still remains in Rhino v6.23 and Rhino7 WIP
I’ve currently spent over an hour this morning clicking on this block name conflict dialog box repeatedly (still going to try and open file) and it has become a real drain on productivity for our team since upgrading to Rhino 6.
Found some further background to this discussed here
https://mcneel.myjetbrains.com/youtrack/issue/RH-26904
and
a ‘simple prompt’ seems to have caused some major headaches for those that work with extensive multi nested linked and embedded block assemblies