Craig opened a case with our support team, but I’ll post my answer here as well in case anyone is following this thread.
While you can merge customers in QBO, the API, which we use for sync, does not support this and therefore, Method has no way of knowing that a merge has occurred. This is detailed in solution No. 202 of our Help Center.
If a merge is done in QBO, Method does not know to relocate the transactions from the original customer to the one that it was merged to. You can fix this by locating the transactions in QBO, re-saving them and performing a sync. This will force an update on the transaction and update the customer that it is assigned to in Method.
The activities on the other hand seem to get lost completely. They can still be found in your activity list if you know how to locate them either by the activity number or the description, but they will no longer be assigned to a customer. As long as you can locate them, you can re-assign them to the merged customer. Just make sure that you’re aware of this when performing a merge in QBO.
Due to this, I do not recommend performing a merge on a customer in QBO. While it can be done, there is a bit of cleanup that needs to be performed by the user to make sure all records end up in the right location. This will especially be an issue when dealing with customers with a large number of transactions / activities / cases / opportunities etc. I hope this helps.