Well, not handling collisions helps a lot with exposing bad CSPRNGs. If they (and e.g. OpenSSH as mentioned in the original 2014 bug report) did handle collisions, it could've remained unnoticed.

There shouldn't be collisions. I mean that really: if you see a collision it's so much more likely that your computer / program / source of randomness is faulty [as in this case] than that the two random numbers collided that it's not worth considering the collision case.

But there can be collisions, at least in theory. And as we can see, in practice too.

Not checking for collisions because you trust that an RNG returns unique values is a fallacy and should be avoided. Especially since it's so easy to deal with the problem.

It would be better to report the collision because most likely it means some error.

Yes, of course. As long as you do something. Just ignoring it because it's assumed it'll never happen is just bad design.