(Using Manifold 184.108.40.206, 170.3, 170.4)
When we use Edit > Merge > Merge images, the internal code handles some things automatically.
One helpful thing is that it works out local offsets for the merged image, using the full rectangular bounds of source tiles. (The source images might completely fill the combined bounds, or some parts might be empty. Either way the lower left corner of the overall bounds is used to calculate offsets.)
If we specify these values ourselves, e.g. by specifying local X and Y offsets for the merged image, the values are ignored. An automatic calculation is always used.
On the other hand, we do need to specify the target output resolution, since that is not adjusted automatically to match source imagery. By default, output resolution is taken from the X and Y local scales of the containing map. If the map uses default metrics, then output resolution will be 1 unit in X and Y, regardless of the resolution(s) of the input images. If the map uses local scales other than 1, then those scales are used. However, in either case, we can specify a target resolution manually, by setting local scales in the coord system section of the Merge Images dialog.
This is all fine, though in both respects it could probably be made simpler or more obvious. We might have to experiment a bit to see exactly how things work, but basically fine.
On the other hand, it seems there may be a bug in this process, specifically in the automatic calculation of the local X offset of the output image, for some but not all values of output resolution.
When merging images with 0.3mpx source resolution, the local X offset for the merged result is exactly correct if the target resolution is any of 1, 0.1, 0.2, 0.25, 0.4 or 0.5mpx.
But when merging the same source images with a target of 0.3mpx (the source resolution in this case), the local X offset for the output is incorrectly reduced by 0.1m. The merged image is shifted west by 10cm. The misalignment is enough to see at close zoom when compared against source data.
Different misalignments occur at different target resolutions. For example, -0.4111... at 0.6mpx, -0.111... at 0.9mpx, -0.9 at 1.1mpx, -0.4111... at 1.2mpx. (The misalignments for 0.6 and 1.2mpx are the same.)
Correcting the local X offset for the merged image to the expected value corrects the misalignment. (So: always check.)
I get this problem consistently whether merging ~100 images, ~1000 images, or two images (and regardless of their arrangement), using 220.127.116.11, 170.3 or 170.4. (There are significant differences in how maps are handled in 170.4, but they don't affect the problem described.)
The Y offsets in the results were always correct.
I will send in a report, but am posting on the forum as well, since others might trip over this in the meantime, possibly without noticing.