If you are already using Composer Merge Plugin 1.4 (or older) and you are updating the plugin to 2.0 (or newer), it is recommended that you update the plugin first using Composer 1.
What is the procedure if we are already using Composer 2 and cannot downgrade?
Consequently, Composer will be unaware of the merged dependencies and will remove them requiring you to run composer update again to reinstall merged dependencies.
The readme says:
What is the procedure if we are already using Composer 2 and cannot downgrade?