Several minor remarks.

> @@ -1885,12 +1881,11 @@ xferOptimization(Parse * pParse,      /* Parser context */
> 
>       /*
>        * Xfer optimization is unable to correctly insert data
> -      * in case there's a conflict action other than *_ABORT.
> -      * This is the reason we want to only run it if the
> -      * destination table is initially empty.
> +      * in case there's a conflict action other than
> +      * explicit *_ABORT. This is the reason we want to only
> +      * run it if the destination table is initially empty.
>        * That block generates code to make that determination.
>        */
> -
>       if (!(onError == ON_CONFLICT_ACTION_ABORT &&
>           is_err_action_default == false)) {

AFAIK we don’t use == false comparison. Instead simply use ! is_rr_action_default.

>               addr1 = sqlite3VdbeAddOp2(v, OP_Rewind, iDest, 0);
> diff --git a/src/box/sql/vdbe.c b/src/box/sql/vdbe.c
> index 5f9bc13..bc169d9 100644
> --- a/src/box/sql/vdbe.c
> +++ b/src/box/sql/vdbe.c
> @@ -4009,7 +4009,7 @@ case OP_RowData: {
>       u32 n;
> 
>  #ifdef SQLITE_TEST
> -     if (pOp->p5 == 1) {
> +     if (pOp->p5 == OPFLAG_XFER_OPT) {

Flags are usually tested with & operation:

if (pOp->p5 & OPFLAG_XFER_OPT != 0)

>               pOp->p5 = 0;
>               sql_xfer_count++;
>       }
> diff --git a/test/sql-tap/gh-3307-xfer-optimization-issue.test.lua b/test/sql-tap/gh-3307-xfer-optimization-issue.test.lua
> index 34f603f..29f0efe 100755
> --- a/test/sql-tap/gh-3307-xfer-optimization-issue.test.lua
> +++ b/test/sql-tap/gh-3307-xfer-optimization-issue.test.lua
> @@ -1,9 +1,29 @@
> 
> +local function do_xfer_test(test_number, return_code)
> +     test_name = string.format("xfer-optimization-1.%d", test_number)
> +     test:do_test(
> +             test_name,
> +             function()
> +                     if (aftr - bfr == 1) then
> +                             return {1}
> +                     end
> +                     if (aftr == bfr) then
> +                             return {0}
> +                     end

You can simplify it to:

return aftr - bfr;

:)

Also

>+      /* The Vdbe we're building*/
>+      Vdbe *v = sqlite3GetVdbe(pParse);

Use ’struct’ modifier for complex types.
And put dot at the end of comment.