Sorry if I sound hell bend on getting this functionality implemented properly.
But for us this is one very crucial feature.
I test this in Layers_AllTypes demo. Here are the problems that I have noticed:
The layers when cropped tend to get displaced and also the size of the merge layer is smaller then the size of selected layers
When we have selected multiple layer IE is not merging Mask layer with main layer which I think it should
The mask layer cannot be merged even if we select image Layer and its Mask and press Merge button
If we open 300 dpi PSD files with multiple layers IE is slowing down to a crawl on my test PC which is Core i7 7th Gen with 16 GB RAM. You click on a layer it takes hell of a long time to get selected and for the sizing handles to appear
Steps to Reproduce this problem: 1. Open the file 2. Select only those 6 layers as shown in the screen shot in my first post (using Layer Palette) 3. Click on the Merge button below the Layer Palette 4. You will get result as per what is shown in the second screen shot