As others have mentioned, I've got a fair few large families where one of the elder children has died and a younger one has been given the same name - in one case two of my great aunts, my grandfather's younger sisters, born only a year apart. Knowing that mourning one child gives the name to the other is always sad.
The one that's given me the most hassle (so far) in trying to separate are not siblings, but cousins. Two brothers, both living close to each other in Preston in Lancashire. Both have daughters born 3 months apart, one in late 1841 and the other in early 1842. Both girls are named Margaret, , as it seems both sons wished to name their first daughter after their own mother. As the fathers are brothers both girls have the same christian name and the same surname, and live about 3 streets apart. So far, so good.
7 years later, the younger of the two brothers, who had moved his family away, is widowed. His children are separated amongst his family and that of his late wife, and the eldest girl goes back to her Uncle, her father's elder brother, and his wife. Maybe it was thought that it would be nice for her to grow up with a cousin of almost the same age, though I still think it's sad that she went on her own so was separated from her younger sisters. I'm sure everyone did what they though was best at the time.
But for me, 3 generations on, trying to track those two girls, first cousins, through the census - same christian name, same surname, same address, same age, same place of birth! Got there in the end though...