Definitely read the archlinux wiki provided.
Not even close 
It’s more like a conditional replacment that requires manual action.
It is a new version of a configuration file, but it doesn’t overwrite your current configuration file because it has been modified by you or a process since it was originally installed. The change to the configuration could be a new option, an updated comment or a line removed. You need to take action and review what changed. You want the options (they are normally commented and/or the default), but you don’t want your changes lost.
You can use diff to compare them. I run DIFFPROG=meld pacdiff as root. Here is an example of what I see at the terminal (in addition to meld):
=> pacnew file found for /etc/locale.gen
:: (V)iew, (M)erge, (S)kip, (R)emove pacnew, (O)verwrite with pacnew, (Q)uit: [v/m/s/r/o/q] :: (V)iew, (M)erge, (S)kip, (R)emove pacnew, (O)verwrite with pacnew, (Q)uit: [v/m/s/r/o/q]
removed '/etc/locale.gen.pacnew'
==> pacnew file found for /etc/ImageMagick-7/policy.xml
:: (V)iew, (M)erge, (S)kip, (R)emove pacnew, (O)verwrite with pacnew, (Q)uit: [v/m/s/r/o/q] -> Files are identical, removing...
removed '/etc/ImageMagick-7/policy.xml.pacnew'
==> pacnew file found for /etc/pulse/default.pa
:: (V)iew, (M)erge, (S)kip, (R)emove pacnew, (O)verwrite with pacnew, (Q)uit: [v/m/s/r/o/q] removed '/etc/pulse/default.pa.pacnew'I will click V to view the changes side-by-side. In meld, I can walk through the changes line-by-line and accept a line if it does not change my preferred setting. I close and save the file and then respond with R to remove the <config>.pacnew file.
IMPORTANT: Always read the Announcement associated with an upgrade because they contain important information about the upgrade and any steps that might be necessary. There is a section toward the top, Known issues and solutions. This section seems to be carried forward to the next update, so there is a bit of history. Checkout the 2022-06-12 - Locale file changes.
I’m updating this entry to add, in addition to the Manjaro Annoucements, a Manjaro user should also view the Archlinux home page, which contains the Latest News. The news may contain manual steps or highlight major changes to packages.