Unable to move merged records into Segmented House file

After merging a record, you may find that you can no longer move that record into the Segmented House file. You may receive the following error:

Merged/Duplicate ID: The ID in the file was merged and is now a duplicate of 'XXXXXXX'
The reason you cannot move a merged record into the Segmented House file is because the original record is now a duplicate of the target record into which it was merged. This is still the case even if the original record is "reactivated" because essential record identification information has been moved to the target record.

Environment

 Blackbaud CRM
 4.0

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