Error in Photo Merge

I would expect a difficult pano merge especially when a tilt-shift lens has been used. Such shots will not analyse and therefore process conventionally so far as their perspective (the lens axis / subject convergence centre being moved, in effect, off-centre within the captured frame).

Do you get results you like better, from completely standard photos (shot nodally coincident if possible)?

Also, can you please show an example: what particular form of "distorted results" are you noticing, and what would you want to see instead?

Tilt-shift and also pano merging: all arguably a distortion, or (expressed more neutrally) involving "transforms" relative to a natural capture. And those "transforms" happen in pursuit of some goal: it would be helpful to understand what goal that is, for you. After all, some people find converging verticals 'disturbing' in a photo - while for other people, it is the outcome from keystoning correction / lens shift movement that they would experience as 'unnatural'.

Is that

Photo Merge HDR

or

Photo Merge Panorama

or

Photo Merge Panorama and HDR?

Which projection did you use? If you created shifted images, then merge them using perspective, not one of the other two options.

Never had any issues so far, even with regular lens shots.

Which version of LrC exactly?

Camera type? RAW?

How much do you overlap?

Can you share a sample?

.. needs to fix this ... does not help. You need to elaborate much more.