What happens when 2 clients modify the same iCloud synced Note?
An iCloud-synced document is implemented with the NSDocument class. The full guide to this class including details on conflict resolution is the Document-Based App Programming Guide for Mac. Briefly, conflict resolution is attempted automatically. If the most recent document is not clear (the most recent, based on modification date is favoured) then the Versions user interface is involved and the user must select the correct document to resolve the conflict.