I believe this to be a bug and will submit a test for it shortly.
How should darcs behave when there is a changepref conflict?
Marking such a conflict up would be a bit awkward.

Is this by any chance, a feature and not a bug?

A UI proposal for how this *should* work:

One way might be for (a) darcs to mark the conflict in the prefs file the same
way it marks regular files and (b) the prefs file parser to be smart enough to
detect conflict markers, and refuse to do anything until you have done
something about it.

I'll also note that the current strategy just seems to be to pick one of the
preferences and ignore the other.  It would be worth checking to see if this was
deliberate or just an oversight.  We do something similar for marking up file
rename conflicts, I think, and there it is deliberate and somewhat sensible.

Keep in mind that the core correct behaviour for conflicts is to ignore BOTH
sides and go back to square 1.  Any conflict marking is built on top of that, in
the working directory.

Another word of caution: even if we do decide this is a bug, this may be one of
those situations where we have to enshrine the bug as a feature for darcs-1 and
darcs-2 repositories (and resolve to fix it for darcs-3).  Proceed with caution.

Petr pointed out this text from help setpref:

Note that merging is not currently implemented for preferences: if two
patches attempt to set the same preference, the last patch applied to
the repository will always take precedence.  This is considered a
low-priority bug, because preferences are seldom set.

So it's a known bug.

Let's defer this to Darcs 3