It depends on the album art rule you setup.
For a separate image file in the same directory as your album's music files, bliss will use this and not overwrite it when the name of the image is the same as (or has the same prefix as) the 'Saved artwork filename' setting, unless some other rule is broken for which there is an automated fix (e.g. maximum size, see below). If a file exists with a different name, it is ignored by bliss.
For existing embedded art, if you have chosen to embed art it will not be overwritten.
For all art, existing art will be preferred over Web based art when a rule needs to be satisfied. E.g. if you have a separate image file but no embedded art (and you have said you want art embedded), the separate image file will be embedded.
For all art, if you have chosen a maximum size below that of the art, it will by default be overwritten automatically. You can change this by choosing the 'Manually' for the 'Overwrite existing art' option.
Any other FAQs I forgot or clarifications required? Post your ideas below!