It can. It depends on what changed. If both of you touch the same file in a conflicting way you'll have to merge the commit with the conflict. If you don't then it just auto magically works.

For example if you have commits A - B - C with a branch A - D with D adding a brand new file you can trivially rebase (IE no need to merge) D onto C for a history of A - B - C - D

The best part about rebasing imo is that you get to merge commit by commit. Using the previous example if there's a conflict in commit B but nothing in C all you have to do is fix commit D to handle the changes B made, nothing else