The way this works hasn't changed in many years. It's clip dependent.
If OPTIONS | EDITING is set to Ask 
and either the FROM or TO clip does not have enough extra content at their cut point to accommodate the transition length, then the warning will appear.
If Generate Freeze is chosen the FROM clip will freeze halfway through the transition and the TO clip will be frozen until halfway, when its movement begins.
Shortening the length of transition length can minimize the 'look' of a freeze.
If Move Clip to Overlap is chosen, all later clips will shift slightly to make room for the transition. This may throw audio that is not linked to video out of sync.
Allowing extra video at the end of the FROM clip and start of the TO clip may avoid the issue entirely.
If OPTIONS is set to Freeze or Move then that action will automatically be applied, with no prompt.