Why is it possible to declare variable with same name in the REPL?

The interesting design feature of the REPL is that your two definitions are translated to:

object A {
  val greeting = "hi"
}
object B {
  val greeting = "bye"
}

A subsequent usage will import the last definition:

object C {
  import B.greeting
  val message = s"$greeting, Bob."  // your code
}

You can witness the exact wrapping strategy with scala -Xprint:parser:

object $iw extends scala.AnyRef {
  def <init>() = {
    super.<init>();
    ()
  };
  import $line4.$read.$iw.$iw.greeting;
  object $iw extends scala.AnyRef {
    def <init>() = {
      super.<init>();
      ()
    };
    val message = StringContext("", ", Bob.").s(greeting)
  }
}

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