Windows 10 x86-64
NVIDIA GeForce GTX 670
Broken: 2.77 22a2853
Short description of error
Bevel tool with "Clamp Overlap" leaves degenerate geometry.
Exact steps for others to reproduce the error
Take any polygonal object (a cube works for simplicity).
Select some nearby edges (ex: two opposite edges on a cube's side) and attempt to bevel with "Clamp Overlap" selected.
Increase the bevel until they touch.
There will be degenerate (0-area, etc.) geometry sandwiched between the bevels, which will do all the usual nasty things (wreck smoothing, confuse edge/face loops, etc.)
Workaround: Run "Remove Doubles" on the affected geometry. The problem is that there might be elsewhere on the model that (for some reason) you might want degenerates? It's difficult to select the degenerate section after the bevel has been performed without selecting the whole mesh. The bevel tool should have enough information to isolate the degenerates that it's responsible for before it returns, though, so it should have the option to clean up after itself (without touching the rest of the model).
This might straddle the line between feature and bug. Sorry if this is too much of the former!
Demo Blend file: