Merge SUB-folders replaces instead of merging? I can not beleive more people don't have a problem with this. Merge contents in Lion or ML does NOT merge contents if 1 or more of those "contents" is a subfolder

Merge contents of two folders works great if they are files inside the merging folders.. But if they have same named subfolders, the merging folder will REPLACE, not merge the destination's subfolder

EXAMPLE:

Drive1 / Folder1

               - text1.txt
               - text2.txt
               - / subfolder / 
                         - text3.text


MERGE TO

Drive2 / Folder1

               - text1.txt
               - text2.txt
               - / subfolder / 
                         - text1.text
                         - text2.text


this should get text3.txt merged into Drive2's subfolder from Drive1's, but instead this subfolder is REPLACED, and NOT MERGED!! The resulting subfolder only contains text3.txt and text1 and text2 have vanished!

Anyone else experiencing this? I can't find any acknowledgement from Apple that this is even an issue. 

Anyone shed light on this be appreciated, as well as fix or work-arounds for doing proper merge when (almost identical) subfolders exist
I use an alternative manager http://www.binarynights.com/ as a workaround. 

If you copy folders there, Forklift will ask you if you want to merge them or replace. Replace option works how you would expect. 

However, when you move folders, the replace is the only option.