We should document this behavior somewhere at some point but working on the encrypted data from multiple locations works the same as if you’d work on unencrypted data from multiple locations.
If there is a sync conflict, you’re probably familiar with how most cloud storage services deal with this. They’ll create a conflict file (e.g., by appending a (1) to indicate that there was a conflict) and you have to figure out which file to keep.
The same happens on encrypted files. Cryptomator is able to detect sync conflicts and will show you the conflicted file with a (Conflict XYZ) at the end.