OK. Here's my theory.
I'm guessing that merging the panorama might need more RAM than your computer has, because it sounds like what you are seeing is Lightroom asking the OS for more RAM, because if it isn't there, the OS must start consuming drive space to use as temporary virtual memory.
Using my laptop with 16GB RAM installed, I ran a test on a panorama I have that's 13 raw images, 20MB each, with some other applications also open. Total RAM (all applications) use jumped from around 9.5GB before the merge to peak at 13.5GB and back down around 8GB when finished. Virtual memory swap file use jumped from 41MB at idle to 422MB during the merge. This is pretty typical of how RAM behaves when I merge panoramas. But I usually don't see a significant drop in the amount of free drive space. I think this is because my system has enough RAM (16GB) to perform the entire panorama in RAM without going to virtual memory.
Your raw files are larger than mine, and you have more of them. It’s reasonable to assume that during a pano merge, your RAM usage would peak higher than mine. With 10GB RAM installed on yours, the system would definitely have to start using drive space to complete the merge, and since total system RAM usage during my merge was almost 14GB, 20GB is not out of the question for yours. VM is temporary so the system will eventually release the drive space used up during the merge, but if you want to get that space back right away, restart your computer.
It might not be the Lightroom disk cache…on my laptop it's only set to 1GB (I set it much higher on my desktop since the drive is larger there).
And by the way, while I didn’t lose any drive space when merging my 13 images in Lightroom, when I tried this in Photoshop I temporarily lost around 10GB of space to the VM swap file. So Lightroom may actually be doing this more efficiently than Photoshop.
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