Can a directory conflict occur?

console

 12:24:41 ⮀ ὐB 100%  cmyers@powerhouse ⮀ git init repro
Initialized empty Git repository in /home/cmyers/repro/.git/
 12:24:43 ⮀ ὐB 100%  cmyers@powerhouse ⮀ cd repro
 12:25:10 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @master ⮀ echo "# Test merge conflicts with empty directories" > README.md
 12:25:12 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @master ? ⮀ git add README.md
 12:25:16 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @master ✚ ⮀ git commit -m"initial commit"
[master (root-commit) 02d25d9] initial commit
 1 file changed, 1 insertion(+)
 create mode 100644 README.md
 12:25:19 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @master ⮀ git checkout -b left
Switched to a new branch 'left'
 12:25:29 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @left ⮀ mkdir foo
 12:25:53 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @left ⮀ echo "foo.txt" > foo/foo.txt
 12:27:47 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @left ? ⮀ git add .
 12:27:50 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @left ✚ ⮀ git commit -m"foo"
[left 50856ad] foo
 1 file changed, 1 insertion(+)
 create mode 100644 foo/foo.txt
 12:27:54 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @left ⮀ git checkout master
Switched to branch 'master'
 12:27:59 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @master ⮀ git checkout -b right
Switched to a new branch 'right'
 12:28:32 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ⮀ echo "bar" > bar.txt
 12:28:34 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ? ⮀ git add bar.txt
 12:28:38 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ✚ ⮀ git commit -m"bar.txt"
[right aa5ac34] bar.txt
 1 file changed, 1 insertion(+)
 create mode 100644 bar.txt
 12:28:42 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ⮀ mkdir foo
 12:28:48 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ⮀ ls -a foo/
.  ..
 12:28:53 ⮀ ὐB 100%  cmyers@powerhouse ⮀ @right ⮀ git merge left
Merge made by the 'recursive' strategy.
 foo/foo.txt | 1 +
 1 file changed, 1 insertion(+)
 create mode 100644 foo/foo.txt