HTML Help Workshop is broken, too, at least as far as this
issue is concerned (always has been).
To merge the TOCs successfully, you need to use the TOC &
Index Editor in FAR (
an inexpensive shareware tool that is free to use for the first
couple of months. Or you can edit your master contents file
manually, in a text editor like Notepad, and then recompile the
.chm file with HTML Help Workshop, as described here: