When a Theme Store theme whose code you changed gets an update, each file is compared three ways: the version you installed, your version and the new version.
A file you didn't change takes the new version.
A file the update doesn't change keeps your version.
A file you both changed is merged. A merge that doesn't pass the checks, or stops a page from showing, isn't used.
A file that can't be merged is a conflict: your version stays until you decide.
Preview the update first to see what it adds, updates, merges and leaves in conflict. Update the theme itself, or update a copy and keep the theme as it is.
An update can also change how a section holds its content, for example moving a section's heading, text and buttons into blocks you can add, reorder and remove. Your pages are converted when the theme updates, in every language, and look the same afterwards.
Resolve a conflict
Each conflict shows the installed version, your version and the new version. Keep your version, take the new version, or write your own merge and save it; your merge is checked like any save. Until you resolve a conflict, the file keeps your version, and the next update still compares it with the version you started from.
An update can be undone for 30 days. Undoing it brings back the theme as it was, including its earlier conflicts.