Merging an Inventory item is dangerous; you are asking the system to Recalculate everything, whether that is FIFO, Average, Assemblies, Margins, etc. That one task should never be done. Inventory items are either unique, or they are the same item serving the same purpose and you didn't need More Item Names for them. This is called FF&F: Fit, Form and Finish. Just because a part replaces a part doesn't always make it a new part number, in other words. Or, it is too different and gets its own item name.
For organizational purposes, you can confirm old inventory items as 0 value and 0 on hand, and assign them as Subitems under a common Parent named Old Items, then make the Parent item inactive and it hides all the child levels, too.
