Testools merge functions don't work properly and the merge dialogues is especially hazardous and potentially gamebusting, my guess is it could be that Testool corrupts the esp/esm files it is only supposed to read from. It happened to me once , after using Testool's merge functions i wasn't able to load save games or even start a new game so i ended up installing everything from scratch.
Ancient wisdom (it appears now, and if I remember correctly) was that merging dialogue using TESTool possibly wasn't a great idea, and would probably break some things.
Merging objects using TESTool (or maybe anything, but definitely TESTool) was extremely frowned upon, and would definitely break things.
I think the consensus was that TESTool was a very good effort for its time, but that it had been well and truly surpassed by Mash, etc.
I'll defer to more ES-technically qualified people, but that's my recollection.