It doesn't make since to create 2 playlists on the same level with the same name anyway.

It's confusing, granted, but the name is not necessarily the only thing which distinguishes between playlists (or tracks). I can contrive examples where you might want it.

For example, if you have these playlists:
Happy/Fast
Happy/Slow
Sad/Fast
Sad/Slow

Then, if you just want a "Fast" playlist, you can put the happy and sad "Fast" playlists into another one. But, they're both still called "Fast". So in fact, you could have
Fast/Fast (the same as Happy/Fast)
Fast/Fast (the same as Slow/Fast)

Now, I'm not saying that's a good way to arrange your music, but it's conceivable that somebody might want to do it.

Of course, your suggestion for making emplode ask about it doesn't preclude this, and seems like a sensible idea.

Richard.