"Customer confusion" encompasses an array of to[pics. Thus, It can depending on the circumstances. There are ample examples of confusion related to words/brands used in advertising and certainly differences in the "take-away" message from advertising. In addition, the ways in which people think about products are different partly based on context. A common example is BREAD. In the US we understand many items to be included in this category. In some countries the translation of the term BREAD means only a certain type of loaf bread and other items use a completely different word. My colleagues from Estonia marvel that when I talk about bread I may be talking about white bread, flat breads, corn bread, muffins, etc. To them, bread is only sour dough rye.
According to my observation, marketers generally seek to maximise consumer confusion as a "confusopole" guarantees pseudo-USPs. A good example are insurance products.
This confusion is sought to be mitigated by legislation (e.g. EU-wide, national) and standardisation (norms..) on the one hand and social sanctions (press, consumer associations, boycotts..) on the other.