Considering a multilanguage website with subfolders using "Add Store Code to URLs"
site.com/it (italian default)
It seems that magento keeps default language content both on site.com and site.com/it.
Am I missing something or it is content duplication that leads to seo penalization?
What address will index google if both have some content?
I think it would be needed to set a 301 from site.com to site.com/it or maybe better autoredirect based on browser language like many big Magento stores.
What to you think?
In cases like yours, it's generally recommended to use the hreflang tag. That will help you notify Google that pages with identiacal content are just different language versions of one and the same page.
Alternatively, (if you have your content on different sub-domains, e.g. site.com, site.co.uk) you may use a cross-domain canonical tag. Multi-language pages with identical content located on different domains should be pointed to the main one with this type of canonical tag.
You can learn more about the tricks of multi-language and multi-regional SEO in our blog post.
By the way, our extension SEO Suite Ultmate supports both a cross-domain canonical and hreflanf tags.
You may explore the demo version of the extension here: http://www.mageworx.com/seo-suite-ultimate-magento-extension.html
Hope it will help you to optimize your multi-language websites.