The option was recently introduced with PTF RO89717 to correct the behavior of the BSTXCOPY utility and mimic IEBCOPY as much as possible. BSTXCOPY can be run outside of Endevor for the conversion of PDS load libraries to PDSE load libraries and PDSE back to PDS.
When some of the members of the INPUT PDS are already present in the output PDSE library and replace is not specified - like COPY INDD=(IND1,R) - BSTXCOPY will issue the C1X0503E error and stop processing. The rest of the 'non-duplicate' members are not copied.
What is the meaning of the ENHOPT MSGSEVERITY_C1X0503=E/W option in the ENCOPTBL?