Things absolutely can be lost forever in a merge... if someone first wipes out or removes/alters portions of the bio of one of the profiles, and then later that profile is merged into another one, then the original bio, before the more recent edits that occurred prior to merge, is gone for good... this has happened to me.
This could be fixed, if when merging profiles, the full history of both profiles was merged... though I understand that is not the easiest of things to accomplish.
Perhaps if one single history entry were added to the merged profile with a concatenation of the full history of the profile that is being disappeared, that would be sufficient to ensure no history is ever lost....