I just answered this yesterday in your private support ticket. For the benefit of the rest of our customers, here's a copy of my response:
You can have two people working in the same project at the same time... but what you can't do is have two people working on the same test at the same time. Test Studio tests are stored in proprietary JSON format and changes cannot be merged. They're not like source code files (which are essentially text files) in which it's possible to merge changes.
I can tell by the output from git that two people changed the same test at the same time. You must discard one and keep the other.
Just make sure that different people are assigned to work on different tests and you should be fine.