Apologies for the delay in responding... with forums moving around I missed this idea exchange.
Merging of policies needs to detect and manage collisions. What happens when two policies being merged both have different values set for the same setting? Which one wins? How do you manage all the collisions when your merging 10?
Perhaps we should consider a "consolidate GPOs" - that does a merge and if there isn't a single conflict, they all go together. But if there are conflicts, we stop and report and report the conflict for you to fix. How does that sound?