Merging is considered a Destructive_Edit, because some data can be lost.
When merging multiple entities, one of them will always be designated the "target". If any fields have conflicting data (e.g. duplicate artists with different Areas), the data from the "target" will be kept.
For artists, you will be given an option, "Update matching artist and relationship credits to use the new artist’s name". If you select this option, all instances of the artist's name will be changed to the "target" name. If you don't choose this option, the alternate name(s) will be retained as artist credits.
The end result is that all references to the merged entities will now be redirected to the "target" entity.