core the community framework that is extensible.
Core by default is just a very thin forum software. You can install and use it. As such it would be a list of discussions with user signup and log in. There are some other minor features that are part of core out of necessity.
bundled extensions are extensions maintained by the core team and shipped with Flarum.
We do not add new bundled extensions blindly. Because everyone has different requirements for their community and as such if we would try to please the whole community by adding features as bundled we would ship over a hundred of them.
Also understand that each extension causes huge maintenance weight on the core team. We are a small team, in fact usually it's just a couple of people carrying all the weight of moving the product forward. A small team cannot maintain every feature everyone wants. If we would do that, the extensibility, quality and security of Flarum as a software would degrade, but especially impacted would the development pace.
conflicting extensions are a responsibility of the extension author at first. Once the cause of such conflict is identified and pinpointed to originate from Flarum core or any bundled extension, the core team will take care of resolving those conflicts.