Trying to merge folders with obviously different contents, but only get "replace" option.

What I found: the folder merging works only when one folder ISN'T a full copy or a subset of another one. For instance, trying to merge two folders with the same name while hitting Option will end up with different results, depending of folders' content:

• [a+b+c] merging to [a+b+c] = FAILURE (no 'Merge' button)
• [a+b+c] merging to [a+b] = FAILURE
• [a+b] merging to [a+b+c] = FAILURE

but

• [a+b] merging to [b+c] = SUCCESS (I can see 'Merge' button)

Well, for me it looks like a poor UI, but it is how they made it.

Yes this will happen if the folder has the same name as the folder your transfer! Better to copy the folder contents and transfer!

Maybe there is a third party app out there that can do this, but I've never checked (you need to be careful in vetting third party apps).

It should be possible to create a script to automate the process. I'm not sure if AppleScript is the preferred method these days or not. I definitely cannot help with a script, but there are a few regular contributors who are very good at these things. It may be better to have this thread moved over to the Mac OS X Technologies forum where the scripting options are usually discussed.

Without the option to "keep both", no matter how you do the "merging" or copying, files of the same exact name will get overwritten.