My copy of Word 2016 doesn't behave that way, although what it does is almost as puzzling.
If the macro name that I enter in the "Macro name" box of the dialog is one that doesn't exist in the file selected in the "Macros in" dropdown, the macro editor immediately opens with the stub of the macro in the NewMacros module (which is created if it
doesn't already exist).
If the macro name is one that does already exist in the chosen file, the macro editor opens and shows the code of the macro (same as the Edit button), but it also creates a stub of the same name in the NewMacros module -- an unnecessary and potentially error-prone
situation. I guess that's just a hazard of using Create when you should click Edit.
In neither case do I see any question about replacing an existing macro. What's the version/build number of your copy of Word (shown at File > Account)? The behavior I described was in Version 1708 Build 8431.2079, but is the same as I remember from earlier
builds of Word 2016 and all earlier versions of Word.
Re #2: The "real" Macros button appears on the Developer tab, but because that tab is hidden by default, a second copy is on the View tab for use by people who don't do development work. (There's no Tools tab because the folks who created the first ribbon
in Office 2007 considered the old Tools menu to be a "junk drawer" and didn't want another one.)