Companies Identification Criteria is not clear

I am trying to understand exactly how Mautic identified duplicate companies and merges them. The documentation (Companies — Mautic Documentation 0.1 documentation) states 2 possibilities:

  1. The Company name field is a unique identifier by default. You can choose any other Company field as unique identifier in the Custom Fields section.

  2. Mautic identifies Companies strictly through a matching criteria based on Company Name , City , Country or State . If a city or a country isn’t delivered as an identifying fields to identify a Contact, the Company won’t match.

When running an import, which method is used?

Under what circumstances is #2 used?

Your software
My Mautic version is: 4.4.11
My PHP version is: 7.4.33
My Database type and version is: 10.6.16-MariaDB