Merging segments

Hello,

I am trying to merge segments in the source file in. Both boxes "allow source editing" and "merging across paragraphs" are checked, but the "merge segment" option is still grayed out in Studio 2021. I tried to change this by creating a project template with a dummy project, but I am going in circles. Either it is asking me that the project needs at least 1 translatable file, but when I do, it tells me that The specific project location folder already contains some files. Specify and empty or non-existing folder. And when I do, it brings me back to The project needs at least one translatable file.

Please help!

Thanks!

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