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Thank you for reaching out to the Microsoft Q&A Forum and sharing your issue.
Please review the response provided by Q&A Assist above for some initial guidance.
Based on Microsoft documentation, this is expected behavior. The #SPILL! error replaces the previous pop-up dialog, allowing you to resolve the error on your own time, and aligns PivotTable errors with the familiar experience of dynamic array formulas and spilled arrays. When a Pivot Table attempts to expand into a range that is not completely empty, Excel may return a #SPILL! error instead of showing an overwrite warning.
I have also tested this scenario in my environment using Excel version 16.107.2 (26032211), and the behavior is consistent. When there is any content in the destination area, Excel returns a #SPILL! error, similar to what you are experiencing. I was not able to reproduce the overwrite warning behavior observed on your colleague’s machine.
At the moment, there is no setting available to force Excel to display the overwrite warning instead of the #SPILL! error. I understand this may not be the outcome you were expecting, but I hope this helps clarify the behavior.
Thank you for your understanding.
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