@ doggy

It would appear the "Merge" transition is behaving as designed...
The effect is meant to be used as a transition zoom to or from a 'fullscreen' shot of one of your 'Inputs' in a 'Multiview' shot, which in your case, should be to the video playback monitor of your Virtual Set, not another Virtual Set or 'MultiView'.
The 'Resizing' issue might have something to do with your settings and how vMix sees your source inputs, so I would look at that first.


Ice

What I do not like about Merge is the dissolve ....it looks a bit tacky, so what I do, I quicken the the speed, and on most projects, it looks ok.....I even use a straight cut.....

I used it a lot at a presentation where the presenter used Powerpoint in their presentations...Did a screen capture, and use multi input to do a PNP, so I could cut from the speaker to the Powerpoint, and then to the PNP, where I made the speaker small, and the Powerpoint large enough to read from a distance....I used a projector for the output screen, so I had a pretty large output....Can not remember the speed settings, but I think I used 250.....it worked great for me...So, you should try a speed change....