I am glad you asked.....


A great many of posters, I cannot help noticing, are rather carefree, and careless, when it comes to the use of the term 'bug'. Let us clarify a few things.

'Bug' - Defined

Is an actual error in the file itself. Something the file has set up in a way that is, fundamentally wrong, and breaks something in a basic, way that so that EVERYONE experiences it, author, users, and is easily observed or replicated even if all installation procedures are followed correctly. Bugs, can be very minor, or major, or anywhere in between. A 'bug', needless to say, is something you don't want to see in game.

 However, Some(ok many) are incapable of distinguishing 'feature', from 'bug'. Another issue really, but related.

In other cases, bugs can originate from the game engine itself, like the outfit switch glitch.  A top level bug as it were, but I am not referring to those here.

Incompatibility

In Skyrim modding, only one file can ever 'win' when it comes to what the actual game will utilize in world. It is called the Rule-of-One. If you dont understand what this means, learn the term.  When multiple user-created files modify identical game elements,  even in a minor way, they are said to be INCOMPATIBLE. These are not BUGS!. It is simply how modding works. You cannot install two mods(files-records) that modify the same object(s) and expect them both to work exactly as the authors intend in game. Whose mod is 'Incompatible' depends purely on the POV of the person using the mods. Both mods may, or may not have actual 'bugs' in them, but this often has no bearing on whether they are compatible or not(although this is possible). That is a separate issue. 

Another way of expressing this idea is, the last thing you install into your game, is the file, texture, whatever, that the game will utilize. Whether that is a good thing, or not, depends on what you are trying to do.

Compatibility, often tends to be an all-or-nothing proposition.

Incompatibilities can be resolved in a number of ways: through additional files, load order changes, re-installations, customized merge files, Mator Smash utility, or simply not using the incompatible mod(s) at all. 
Whether mod authors deem it worth their while to make other mods compatible with their own is entirely up to them. Sometimes, 3rd party modders step in to provide a fix.

Conflict.

A rather poorly used term that actually means 'Not Compatible' (See above). Problem is, 'conflict' is often used interchangeably with 'bug', when often it is nothing of the sort. A 'conflict' (one file over-writing another or taking precedence over another), and creating an unexpected effect in game, is actually NORMAL behavior. If an author advises you to install their mods in a way to minimize or avoid 'conflicts' with other similar mods, you should do it the way they suggest. What you should not do, is act like a 'conflict', or incompatibility is a 'bug' of some sort just because you don't like the end result of trying to mash two incompatible mods together.

You should to expect (some) mods may 'conflict' with others in a way that never get resolved. 

For a good example of a fundamental failure to understand what the term bug means I give you, the so-called 'black-faced bug'. This particular term is distressingly common in Skyrim modding, and is, almost every case, wrong. The 'black-faced bug' is not a 'bug' at all, but the end result of users mashing incompatible npc mods together haphazardly. So poorly informed users keep saying 'bug', and have to be told, over and again, that the only bug, is in there installs, and not the mod(s) in question, which in all likelihood, function perfectly. Perhaps they need to install a compatibility file, but they don't know how to use. OR,maybe the compatibility file they need  does not exist. Either way, the 'bug' is still a result of user actions, and is not a 'bug' at all.

In reality, this case is nothing more than a user-generated incompatibility, yet user(s), they keep calling it a 'bug', when it is nothing of the sort.

The above is an interesting example, because a modder could in fact create a genuine case of 'black-face bug' in their mod, by making mistakes during mod creation. That would in fact, qualify as a true bug, but in overwhelming number of cases, 'black-faced bugs' are the result of user-generated errors in their own load orders.


'Patch'

Another poorly used term in the Skyrim modding world. In reality,  the term patch means 'bug-fix'. That is what patches actually do. In Skyrim, the term has come to mean something rather different: Make mod A and Mod B play nice together. This is not what a 'patch' does,  a far more accurate term would be > compatibility file, or 'compatibility patch' if one prefers.  

For myself, I try to avoid the use of the term 'patch' simply because the files I create are not broken(usually). If something is in error, I usually produce an update, not a 'patch'. If I want one of my mods to co-exist seamlessly with another, guess what I call it?  > A compatibility file.

Neither mod is our thought experiment above is 'broken', or in need of a bug fix, which is what patches do. What they need, is to their features merged so they are both COMPATIBLE with one another and merge both sets of features in a seamless way.