What is the purpose and effect of check-in/check-out a document?

I tried to check-in/check-out few documents on my DMS instance but don’t quite know what is the effects of these yet. I read on a post by Roberto that: The checkout feature only block new document uploads while the document is edited, it does not block other actions.

If so, how does the system check to block new document upload? Does it mean if a document is checked-out, I should not be able to upload the same file again even with different name?