Official comment
@Cosley > @Master G is correct; it's based on absolute path.
Personally, I would prefer if rekordbox didn't automatically detect duplicates living in another location based on the metadata; if I have a single and an album with the same track, I don't want one of them removed simply because I have one in another location. If I had several songs on that one album which were duplicates, thus removed, and the next time I go to listen to the album, half the songs are missing, I'd be pretty upset.
Honestly, it comes down to better music management on the user's behalf.