Question: What happens when a transaction is included in more than one block?
When transaction is present in more than one block then the first block that is broadcasted on the network will be considered valid, other blocks will be considered invalid and it will be ignored by other nodes.
We should note that the block as a whole is either accepted or rejected, not the individual transactions. So all other blocks having that transaction will become invalid.
This is what double spending problem is, the second transaction will be considered a double spend.