For two addresses to be equal, two identical private/public elliptical curve (ec Smiley) keys have to be generated. Without looking at the source code, let’s assume the probability for this is 2^(-128) for a keyspace of 128 bits. See here for a perspective on how probable it is with a 122 bit collision.
However, if something similar to the Debian ssl-scandal happens, similar keys could indeed be generated. The effect of an individual generating an existing key, is (if I understand it correctly) in effect to make a copy of wallet.dat. Not good at all, but not devastating for all the members of the p2p network.