How do to the Service Cloud APIs handle duplicate contact records?

Environment:

Managed Framework APIs (Connect for PHP, Connect REST, Connect Web Service for SOAP)

Resolution:

When email address sharing is disabled (the default), contacts created with duplicate email addresses are inserted into the database with '.0001' appended to the contact's duplicate email address(es). This will repeat with each additional contact created with the same address, with the number in the extension incremented in each case ('.0002' for example).

Further, if contact records are being created in a loop using threading in a burst of requests from integrations using one of the public APIs (REST, SOAP), then exact results can be the result. This is due to simultaneous requests, and database queries run in parallel in separate server processes (so there is no duplicate when the database is checked, resulting in duplicates). Generally, this can be avoided by not using threading when creating new contact records from an integration. As long as contact create requests for a new contact are not si multaneous,  product-level checks   will  occur.

For further details see 

Answer ID 5653: Areas affected by email address sharing

Answer ID 2831: Householding - email address sharing