Pathfinder Merge acting like Devide

When ever I try to use the Merge tool after Expanding a shape with it's stroke it does not cut out the shapes by its color, it acts more like the Divide tool creating shapes where ever both shapes overlap. It works fine whenever I start a new document but if I start to work on it at some point it gets messed up.

The only work around is going through the "Merge Divided Group" and erasing the overlap duplicate, then uniting the fragments to create the shape I need.

This is also really weird but, when this happens when I try to expand a shape with its stroke (aline stroke on any setting) > expand fill and stroke > Merge = I get the stroke shape and the fill shape the same! it does not cut out properly!

What is happening?

Please help.