I'm always tempted to think that's a good way to replace the old tree when it declines, the successor is already in place, less waiting time. But the younging is in trouble to grow a nice shaped crown. What would it looks like really alone if the big one disapears? A more important concern is the struggle to establish a good and sturdy root system in the middle of the old one. How to put a well balanced set of roots where there are massive obstacles all around? Like you said, strangulation may occur and do a lot of damages but I have a hard time to imagine the small one competing enough the big one to put it in decline. It's more like the young will do something only if the old comes in decline.
I have a big dead chestnut in the midle of the wood. It was the old king of the area. I was happy because a young tree (unknown specie) was growing slowly at his foot since many years and would be a nice replacement. But the young didn't make it due to the oddly shaped root system and the wind blew it over. The big dead ancestor is still there, but the young is gone. Sad.
An other problem is, will the young survive to the fall or the dismantling of the big one? And even if it went through this catastrophic event, it had to deal with the fungi conquering the so close old roots. It can be good enough or deadly.
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