Both Rename FROM "{file}" TO="{clip}" IGNOREEXT and @nodeselect
Rename TO="{clip}" IGNOREEXT
work
WHEN the file to be renamed is in a different folder.
If the file that is the source for the rename and the file to be renamed are in the SAME folder then the error box pops up.
The command works fine, but I think you're confused about what it does.
There's only one file and directory involved in the command: The file you're renaming and the directory it's in.
If you're thinking about a "source for the rename and the file to be renamed" as two separate things, I assume you're selecting a file and using Ctrl-C to put it into the clipboard as you would when doing a copy & paste file copy.
But {clip} inserts the clipboard text. It doesn't do anything if a file is in the clipboard.
You could do that via scripting, however. Or use this, in the Edit menu, to copy the other file's name to the clipboard instead of the file itself:
So you were trying to rename one file with the name of another file in the same folder? The error message is accurate in that case. You can't have two files with the same names.