‘Merge Replication Conflicts’ does not work as expected in Notes 7.0.3 or 8.0

Although the Form property “Merge Replication Conflicts” is enabled, and the Form contains a $ConflictAction field, a replication conflict occurs when modifications are made to different fields in a database.

1. Create a Form that contains two fields.
2. Enable the Form property, “Merge Replication Conflicts”.
3. Create a document based on the new Form.
4. Create a replica of the database.
5. Modify one field in one replica and the other field in the other replica.
6. When replication occurs, no conflict is generated and the later modified document is what is replicated to all other servers. The modifications made in other replicas documents are lost.

IBM Source

Thanks to Gabor for the hint