It does not seem possible to embed one merge module within another.
I had been able to do this with Visual Studio setups.
It means, for example, that if a component in my merge module has a dependency on say the Visual Studio Runtime, I cannot add the appropriate VS merge module to it. So my merge module is not 'self-contained' -anything that uses it has to remember to add the necessary prerequisites/launch conditions that it requires.
Is there a good reason for this restriction?