It's easy to lose sight of the fact--and it is a fact--that, at least in English, words morph from one part of speech to another easily. There's a grand history in English of this sort of change, which is called "back formation", if I've got the concept right. Conflation is a noun form, and it's common enough to found a verb on it.
The fact that a word "isn't in the dictionary" doesn't mean it isn't a word. You said, yourself, that you run into it often. Therefore it is a word. Whether you like it or not doesn't mean it isn't a word. Whether a dictionary author decides to list it doesn't mean it isn't a word.
I'll bet your dictionary that omits "conflate" is a desk dictionary, an abridged edition, a "college edition", or some such description. That means that, in order to make a volume which is useful for most purposes and of a size (and price) that can be handled, the editors have chosen to cut way back on the word list they choose to cover. And even the big unabridged dictionaries, contrary to popular belief, don't have all the words that are and/or have been current in the English language. It's just not possible.