It's saying that the MERGED partitions will be formatted. Not the target partition which will regain size. You're also missing the big "*BETWEEN*" down there...
Maybe it's because you have a Tiger version. I'm running Leopard, so perhaps Apple changed the way mergePartitions works. If you don't want to use it, fine, but I used it and I'm still alive to tell the tale. So now your only options look like clean install (which isn't a big deal if you have an external hd...) or to try and find a different tool you think will work.
This is what I got:
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macbook:~ nick$ diskutil mergePartitions
Disk Utility Tool
Usage: diskutil mergePartitions [force] format name
DiskIdentifier|DeviceNode DiskIdentifier|DeviceNode
Merge two or more pre-existing partitions into one. The first disk parameter
is the starting partition; the second disk parameter is the ending partition;
this given range of two or more partitions will be merged into one. Both disk
parameters must of course be on the same whole-disk.
All data on merged partitions other than the first will be lost.
The first will be erased if it doesn't have a resizable type (e.g. JHFS+)
or if the "force" argument is given.
Merged partitions are required to be ordered sequentially on disk
(see diskutil list for the actual on-disk ordering).
Ownership of the affected disk is required.
The Format parameter is the specific filesystem name you want to erase it as
(e.g. HFS+, etc.). The Name parameter is the name of the final volume created.
Format and Name are ignored if the first partition is resizable.
Example: diskutil mergePartitions HFS+ NewName disk3s4 disk3s7
Note: This will merge all partitions *BETWEEN* disk3s4 and disk3s7!
This will destroy the data on disk3s5, disk3s6, disk3s7 and
any invisible free space partitions between those disks.
disk3s4 will be resized to cover the full space if possible.
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