Ensure Unique Step Name

Even with ‘Ensure Unique Step Name’ checked it is still possible and allowed to manually edit a step name to be non-unique. No error or warning. Is this a bug or by design?

Maybe the phrasing there is not too clear. That feature is only active when adding test steps to a plan. So if you later change the name to be non-unique, then there is no error or warning.
If you need to refer uniquely to a test step, you can use the step ID (GUID) or direct reference if from C# code.

Remember, we also have the step name macro feature (e.g “Step {Enabled}” → “Step True”) and in that case it can be hard to tell if a name is unique or not. And that fact may vary over time.