Folder and File of same name cannot coexist in a directory

[peterzay]

In the Downloads folder, I create 2 objects:
- a folder called test
- a file called test

The second creation fails with the following error message:

The item could not be renamed.
The name "test" is already used in this folder. Please use a different name.

The attached screenshot from Ubuntu 12.04 shows the issue persists to this day. Is this a bug or a desired feature?

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: nautilus 1:2.30.1-0ubuntu1.2
ProcVersionSignature: Ubuntu 2.6.32-37.81-generic 2.6.32.49+drm33.21
Uname: Linux 2.6.32-37-generic i686
Architecture: i386
Date: Mon Jan 2 13:12:39 2012
InstallationMedia: Ubuntu 10.04 LTS "Lucid Lynx" - Release i386 (20100429)
ProcEnviron:
 LANG=en_US.UTF-8
 SHELL=/bin/bash
SourcePackage: nautilus

[Sam_ (and-sam)]

Unable to reproduce on Oneiric
nautilus 1:3.2.1-0ubuntu3.1
and Precise
nautilus 1:3.2.1-2ubuntu4

Created a folder 'test' in 'Downloads'.
Right click, select from context menu 'create new document' -> empty document, name it 'test'.
Or:
Open gedit, content of empty file 'test', save the file as 'test' in ~/Downloads/test.

In both cases the error dialog window can only be reproduced if there already exists a file named 'test'.

[Bowmore (bowmore)]

Creating a folder and a file with the same name in a folder is not allowed. The reason is that a folder is a special type of a file, i.e it's a file including the file mode bit d.
Also see e.g http://en.wikipedia.org/wiki/Unix_file_types

Thus, this does not work
touch ~/Downloads/test
mkdir ~/Downloads/test

an nor does this
mkdir ~/Downloads/test
cat > ~/Downloads/test
Ctrl+D

Marking the bug invalid.