A merge conflict happens when two people change the same part of the same file and the system cannot decide how to combine them. In text, this is routine and usually resolvable: you see both versions, pick lines from each, and move on.
In binary assets it is a different situation wearing the same name. There is no way to take half of one .uasset and half of another. The tool offers you a choice between two complete versions, and whichever you do not choose is discarded. Calling this a conflict undersells it; it is a decision about whose work to delete.
Unreal ships a Blueprint merge tool that improves the odds slightly. It shows the base, remote, and local versions side by side so you can see what diverged. It is a viewer rather than a merge tool: you cannot select individual changes, so resolution means manually copying nodes out of a read-only window into the conflicted graph. Workable for a small divergence, hopeless for a week of parallel work.
The only reliable answer is prevention. Lock binary files before editing so the parallel edit never begins. Nothing recovers gracefully once two people have both spent a day in the same Blueprint.