If I understand the proposed merging procedure correctly, the procedure treats the trillion observers who experience a win of the lottery symmetrically. None of them are "snuffed" any more than any other. For each of the observers, there is a continuous space-time-causality "worm" connecting to the future self who spends the money.

This space-time-causality worm is supposed to be as analogous as possible to the one that connects any ordinary moment in your life to your future self. The difference is that this one merges (symmetrically) with almost a trillion others, all identical.