That's exactly what can happen. Cabal endeavors to prevent multiple versions of a package from being installed simultaneously, but as this post mentioned Cabal does not maintain global consistency so if you do multiple independent installs in the same database then you can wind up with this problem.

In particular this is, for whatever reason, a frequently occurring problem with the `bytestring` library. There are a lot of SO questions related to figuring out why the compiler is rejecting the use of a ByteString type even though it appears it should work... but that's because the compiler error is eliding the package version difference.