In ArcMap, editing a versioned feature class returns the following error message:
Error: Your edits could not be saved because the target version has been updated since you started editing. These edits have been merged into your edit session. Review the changes and save again.
This is expected behavior. The error occurs when the same version of the feature class is edited by multiple users concurrently in an active edit session.
For example, User A and User B start editing the same feature class in the default version. Both users have active edit sessions and are editing different features in the same feature class. User A saves the edits successfully, but when user B attempts to save the edits, the error message is returned. User A's edits are now merged into User B's edit session. User B is unable to save the edits until the merged edits are reviewed and updated, if necessary.
The error only occurs when the edits made by User A and User B do not create conflicts between the two edit sessions. Conflicts must be resolved, whereas merged edits are up to the user to be reviewed. In this situation, User B may or may not correct the newly merged edits. For more information on conflicts, refer to ArcMap Web Help: A quick tour of reviewing conflicts.
If users do not want the merged edits situation to occur, create a new version of the geodatabase each time when making edits. For more detailed steps, refer to ArcMap Web Help: Creating versions and setting permissions.
Note: Optionally, in ArcMap, click 'Automatically save changes only if there are no conflicts' in the Editing options dialog box on the Versioning tab to reduce the occurrence of the error message. For more detailed steps, refer to ArcMap Web Help: Saving edits to a version. However, this option only works if no conflicts occur between the edits made by the users.