If the Merge command is working from G but not from the context menu, it may be a small system anomaly of some kind. Try restarting the song to see if it works. If the context menu doesn't work in that song or any song the first thing to do is to run the Studio One installer again and if that doesn't cure the issue, make a support ticket.
If you make a support ticket be sure to include all relevant information and if possible, include an image showing the clips you are trying to merge and of the Merge menu expanded while those clips are selected.