The JCR merge operation should work correctly on nodes with versions that are "eventual successors" (i.e. source node's version is a non-linear descendant of target node's version). Current implementation checks versions to be only linear (i.e. direct) successors of each other. It should be changed to check successors recursively.
https://github.com/jboss-integration/modeshape/commit/60ebacfad1d3348b9283b9e3d1f3b32a2f9d183a
Fixed before GA - setting to requires_doc_text- accordingly