This occurs when both constituent records are a part of different households. You need to remove the household from the source constituent, then merge once more using the steps below:
  1. Navigate to Constituents > Constituent Search
  2. Open the source Constituent record
  3. Click on their Household record and note the Household record's lookup ID
  4. Select the Members tab
  5. Click the drop down next to the Constituent name and select Remove
  6. Navigate back to Constituents > Duplicates >  Constituent Merge
  7. Merge the two duplicate records
  8. Once complete, navigate back to the Household record
  9. On the Household record, select the Members tab
  10. Click Add and select the newly merged Constituent
  11. Save