A merge failed with
svn: E155023: Can't set properties on '/.../folder': invalid status for updating properties.
Reproduced in a test (attached) that merges the removal of a folder that had non-inheritable mergeinfo.
The merge and its output look like:
svn merge -c5 ^/branch_A .../A --- Merging r5 into '.../A': D .../A/D svn: E155023: Can't set properties on '/.../A/D/gamma': invalid status for updating properties
When a merge deletes a folder then surely it is a bug if it tries to update properties inside that folder.