The merge button status is always in sync with the diff. It is disabled if the diff won't merge correctly.
To answer your earlier question more directly: the diff that is shown is a diff against an earlier master. (It's in fact a diff against the point where the branch forked off of master.)
To answer your earlier question more directly: the diff that is shown is a diff against an earlier master. (It's in fact a diff against the point where the branch forked off of master.)