How does the module system handle definitions with no priority?

I've got two modules

{lib, ...}: {
  options = {
    name = lib.mkOption {
      type = lib.types.str;
    };
  };

  config = {
    name = lib.mkDefault "foo";
  };
}

{...}: {
  config = {
    name = "bar";
  };
}

If I evaluate them together, I get "bar" for the value for name. How does it handle this situation? Is is like using mkForce? Does it bypass the priority system completely?

I imagine the answer is somewhere in this function but I am having trouble working through the logic.
https://github.com/hsjobeki/nixpkgs/blob/985fc9b995c07037f6a6273bafa3526f06bb2343/lib/modules.nix#L818

On a side note, this appears to be the place where option declarations with a default attribute value use mkOptionDefault.

  default = if foo then "bar" else omit;

  default = if foo then "bar" else omit; # if not foo, consider the value unset

  bla = mkOption {
  } // lib.optionalAttrs (cond) {
    default = "bar";
  };