The incremental copy feature used with the Copy Content tool finds a matching destination item using the Unique Key based on the source key properties. The Unique Key is defined and can be altered in the Map Properties option for a list. It is predefined for a library and can't be altered. To modify the Unique, select the Map properties option and changes the Key Properties :
When no match or multiple matches are found, Sharegate can't identify the right destination to update so a new item is created.
To avoid matching a different item with the same Unique Key in a different folder, each match are based on the hierarchy of the file or item. For instance, if you have a file named File.txt in the root folder of a document library and a file named File.txt under a sub folder named Folder, the incremental copy will search for a match for each files under the same scope or folder. This will prevent overwriting the file under Folder with the source file at the root.
Unfortunately, if you migrate a file or an item by navigating down to a subfolder in the Content Copy item explorer, it won't be recognized as the original source item the next time a copy is made from the root folder. For example if we copy File.txt under Folder, the next time we copy the entire library Sharegate will create a new File.txt at the root folder because it doesn't know Folder/File.txt is really File.txt.0