Everything can shadow everything, but usually not in the same context. I get an error for your redeclaration of S.

<stdin>:3:5: error: invalid redeclaration of 'S'
let S = 10
    ^
<stdin>:2:8: note: 'S' previously declared here
struct S {}
       ^

We've talked a bit about having a warning for a variable or function shadowing a type, which you could silence with backticks.

Ah interesting, I only tried it on the REPL. Back ticks would be good. I think this only matters for built in types. Does that need a proposal?

Welcome to Apple Swift version 3.1 (swiftlang-802.0.51 clang-802.0.41). Type :help for assistance.
  1> let S = 10
S: Int = 10
  2> struct S {}
  3> print(S)
error: repl.swift:3:7: error: ambiguous use of 'S'
print(S)
      ^
  3>