I didn't add color labels to folders.
I did choose to stack the images.
I did choose the auto crop option.
I selected 24 raw images to merge into a single panorama.
Not the exact same procedure that you used, but the panorama completed without a problem. Took about 6 min. Using Windows 10.
I followed your scenario and the merge worked ok. OSX 10.13.5 and Lr CC 7.4
The problem appears to be with the Filter.
The merge completes happily when all folders are displayed (have repeated this with 3 groups of jpgs).
As soon as I turn on the filter to show labelled folders (I have created a lot, with a lot of images) screen refreshing slows to a crawl. Then trying the merge again it seems to hang.
I now suspect that in fact it is not hanging, just performing very very slowly. At the moment I do not have time to test this to see if I am correct.
I had a similar problem last night again when the PC appeared to have hung. I decided to leave it overnight to see if it completed.
This morning it had done, and all was well. Looking at the time stamp on the new file, it appears it took approx. 90 minutes to complete the merge.
Most merges complete as anticipated, and take between 10 & 30 seconds.
This is hopeless Adobe. Another merge has been hanging now for 30 mins. Can't use Lightroom for anything in the meantime and the whole PC is slow as LR is using approx. 65% CPU & 50% Memory
I always stack and label green the photos that I do pano merge. With 7.4 my merge command was suspending in LR. After reading the above, I removed the green label from and re-tried the merge command, and the image merge worked flawlessly. Therefore, this suggests there is a problem with the labeling that is freezing up the merge....