It happens pretty often when two different people are adding a new function in the same area of a file. It's likely that as you're working on that function, you'll be modifying the surrounding lines a few times (say, you have a first pass for the happy path, then start adding error handling in various passes; or, handling one case of an algorithm in each commit).
Rebase is still by far the most common case in our repo, as yes, these cases appear very rarely. But when they do happen, it's often worth it to do a merge and mess up a history a little bit (or squash, which messes with history in another way) rather than resolving conflicts over and over.
Someone else was also suggesting rerere for this use case, but I've never used it myself and I don't know how well it actually handles these types of use cases.