The Merge Templates is issued in the following situation:
An error occurred while merging template with <error file>: <error detail>.: During the merging operation, an internal error was detected.
Check whether the extension source files have the necessary permissions; if your disk has available space; if the folder where the extension is being stored exists; launch the IDE (Integrated Development Environment) and build the solution in order to check the exact error. It could be, for example, an error in the formatting of these files. If the problem persists, contact your System Administrator to ask for help.
Update Extension Source Code | Error Messages