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Fixed in 2022.1.X
AssetDatabase.CreateAsset overwites folder without a warning
How to reproduce:
1. Open the attached "New Unity Project.zip"
2. Open the "Example" folder inside Project Window
3. In Menu Toolbar select EXAMPLE -> Overwrite folder
Expected result: The warning is thrown when overwriting the folder
Actual result: No warning is thrown when overwriting the folder
Reproducible in: 2019.4.28f1, 2020.3.13f1, 2021.2.0b2, 2022.1.0a1
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Resolution Note (fix version 2022.1):
Fixed in 2022.1.0a7