What happens if lambda variable name matches a (complex) property name?

MUST all paths wthin a lambda operator be prefixed with either a lambda variable name (potentially from an enclosing lambda operator) or $it/ to reference properties of the base set?
Or is $it/ not required for properties/paths in the base set? Which would require that the lambda operator MUST NOT be identical to any property name in the base set?
My inclination would be:
1) It is not required
2) In case of conflict, lambda variable name wins (you shouldn't pick a lambda variable name that conflicts...)