Users with Edit permission should not be permitted to overwrite existing files if the "Delete" permission isn't granted.
User with Edit permission should not be allowed to overwrite existing files if the "Delete" permission isn't granted.
The reason for removing the "Delete" permission is so users CANNOT delete an existing file in the document library - However if I do not permit a user with "Delete" but they have "EDIT" permissions, they can overwrite an existing document using the same file name.
This permission is essentially the same as providing the delete permission because a user can just overwrite the existing file with a NULL or BLANK file.
SharePoint only notifies the user "You are going to overwrite the file - do you want to continue.?"
Note: The workaround is to remove the "EDIT" permission, but that creates another problem which restricts users without "EDIT" permissions to a Maximum upload of 100MB .
My suggestion is to Increase the upload limitation of users without "EDIT" permission to 15GB - this is the SIMPLE solution and solves both issues.