Rename with dropTarget=true is performed in two phases with each phase is writing to the catalog while holding a MODE_X lock for the collection.

https://github.com/mongodb/mongo/blob/72565dc7c6909fd6f96f5625a9d28c64efed8c9e/src/mongo/db/catalog/rename_collection.cpp#L267-L273

As holding a MODE_X lock does not prevent a lock free reader it may observe the collection as dropped as this is written to the in-memory catalog separately from the rename: 

https://github.com/mongodb/mongo/blob/72565dc7c6909fd6f96f5625a9d28c64efed8c9e/src/mongo/db/catalog/database_impl.cpp#L517-L522

This whole operation must be performed atomically in a single catalog write as MODE_X lock mode cannot be used to prevent readers anymore.