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I have had this work with very complex models. The key is to match the part accuracy. Make sure all the parts are in absolute accuracy and set to a very small value.
In Reply to Calvin Ying:
Is there a way I can create a feature using the voids in this model? I have an user who wants to fill the voids with wax/water to do some simulation.
I tried using the cutout from the merge, not surprisingly it failed. This may work with a simple model but not one with many details.
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Calvin Ying