Good morning, @apinto1 ...
The section on "Replace Duplicate File" does indicate that you should be able to replace an existing file in your "Files" area of your course so that it does not create a duplicate like you describe.
How do I upload a file to a course?
If this is not what is happening for you, it might be best to contact Canvas Support to report this issue so that they could investigate the issue further and create a ticket on your behalf. That way, you'll be updated if there is anything that needs to be addressed by Canvas engineers.
How do I get help with Canvas as an instructor?
Please keep us posted here in the Community...thanks!