call by name : how are clashing variables handled?
Programming languages do not "textually substitute" anything, that would be horribly inefficient. The "textual substitution" definition may be offered sometimes as a sort of textbook explanation, but it usually fails to capture all the details.

There are many techniques for dealing with the problem you describe. By the way, the problem is known as "variable capture" beacuse a binder "captures" a variable.

One possiblity is to eliminate all variable names and use de Bruijn indices instead. Substitution still requires a bit of work, namely shifting of indices, but at least one does not have to generate new names.

Another possibility is to create closures. These are used for evaluation of functions (I did not say "application"!), but in a call-by-name language we could use them for any expression. Briefly, when we evaluate P(i + j) in your code, we create a closure (η, i + j) where η tells us what the values of variables are at that point in the execution (so concretely, η would be something like i ↦ 100, j ↦ 50, P ↦ ..., main ↦ ....). When P actually needs the value of its argument, we evaluate i + j in the environment η (and not in the environment of P), so that i + j gets evaluated in the "old" environment.

There are still many other techniques for avoiding variable capture. Haskell compiles to a spineless tagless G-machine, or at least it used to.