Auto merging happens whenever you double post or bump a thread too early (ie. Bumping a thread in less than 2hrs in the Nook's Cranny forum). Some forums have their own set of bump hours/rules, but I think that for most of the site the norm is 4hrs between each bump. There should be info on that in the faq.
And no, notifications aren't given to anyone when a post gets auto merged. From what I've seen, everyone will only get notified in that brief moment the post was made and said notifications are removed once it's merged.