This is what I did -
I loaded two 32Mb terrains into the TGD project and tried each one separately. Then, I merged the two together into a heightfield shader using the heightfield merge. I did this in both the version TP2 and the version TP4. I did this in exactly the same way in both cases.
Nothing happened, but what is expected - it worked fine. So...it's my conclusion that the TGD I posted here has something else weird going and that it's just a weird glitch. It isn't worth the trouble to search it out, in my opinion, since I'm likely doing something out of the ordinary to cause this problem in the TGD listed here and I don't need it for a project. Please do as you see is best, but I'm happy knowing I can merge two 32Mb terrains without trouble.
If you want to troubleshoot it further, fine. But, I don't see this as an issue with your program.