Files on the destination are never overwritten. As long as this option is selected, the destination only contains the first version of each source file.
Overwrite if source file is newer
Files on the destination are only overwritten if the modification date of the source file is newer than the modification date of the destination file. When editing a source file, the modification date is automatically set to the current date and time, which would cause the file to be synced again. When replacing a source file with an older version, that version wouldn’t be synced until editing it again.
The maximum time tolerance setting defines the maximum allowed time difference between two modification dates to be considered equal. The default is 2 seconds. When syncing two volumes that have the same format, a value of 0 should be fine, but when syncing two volumes with different formats, there might be issues caused by the different time resolution. For example, FAT32 only has a time resolution of 2 seconds; in a sync from an APFS volume to a FAT32 volume with a time tolerance of 0, many files would be constantly listed as having changed, even if they have not. The reason is that the timestamp saved on the FAT32 volume cannot always be saved as it is on the APFS volume.
Overwrite if timestamp or size is different
Files on the destination are overwritten whenever they are different from the source. Since it would be too inefficient to compare the file contents, the modification date and size are compared instead.
The same observations about the maximum time tolerance setting apply as for Overwrite if source file is newer.
Files on the destination are always overwritten, regardless of whether their modification date has changed or not.