My current employer is the first place I have worked where they use the merge for weldments. I didn't like it at first, well, I still don't much care for it, but I do understand the reasoning behind it. We only use it on weldments that require extensive after welding machining.
Our process is to build an assembly as you would expect normally. Generally we would fully detail all those parts, either on the weldment drawing (composite drawing) or on their own drawings if they were going to be used on multiple upper level assemblies. Fully dimension and detail the weldment drawing (with a good pro/e BOM). The last part in the assembly of the of weldment is the merge part and is normally suppressed once the everything is fully regenerated. The machining is done on the merge part, an example merge part I am looking at right now has ~600 machined features.
I wasn't working here when the decision was made to do it this way. I don't know what the decision making process was. I can imagine that not being able to add rounds and chamfers as assembly features played in to it. It's not impossible to model all your rounds and chamfers in other types of features but it can be difficult when it's not just a simple extrude or revolve.
Sometimes merges don't like to regenerate and may take some effort to get it to fully update. And if you have to change out a part of the weldment, if you weren't extremely careful, you might lose ever reference in the machining and every reference in the upper level assemblies also. In general, I wouldn't recommend the method unless you have really done a lot of testing and written a procedure on how to do it consistently. Since all the parts are used, you can't accidently lose them, BUT, if someone decides to delete the suppress merge part from the assembly, you can't easily get it back, in fact, I think you have to send it to PTC for them to reattach it correctly to the model. Also, if someone build an assembly, does the merge and then the assembly gets deleted or lost, that's a bad thing. But, if you use your assembly for detailing the weldment, that makes it so it has a use and won't be "lost".
The other place we use merges is for FEA. Usually you can turn a weldment in to a no gap part in a fairly short amount of time. I consider this a side use that doesn't fit in to the normal flow, just my opinion.
