Have you tested what happens after you enable these settings?
Yes - The users are unable to overwrite an existing file unless I give them Create permissions on the folder.
This gives them access to add additional files, which is what I am trying to avoid.
I have a set of users which I need to give permissions to simply overwrite an exisiting file, without the ability to add new files. They have a newsletter, and they need to overwrite this existing file
For the enclosing folder I'm giving them Read, Change and Publish rights.
For the file itself I'm giving them Read, Create, Change and Publish rights.
In theory, this should allow them to drag-drop a file with an existing name and overwrite it, which is what I need to do.