Photomerge PSE 2020

The shortcut control-k > Reset preferences on next launch button is just quicker than the Edit > Preferences > General method of getting to the same screen.  Either way works.  Clicking the button resets your preferences next time you launch Photoshop Elements  --  so invoke the shortcut while PSE is running.  Resetting preferences can sometimes fix issues like the one you're having.  It may not work but no harm in trying. 

Hi Georgia

An old school manual merge technique begins with creating a single document that contains both images, ie: each image will be on it's own layer inside the same document.  To accomplish this, "place" or "copy/paste" image B on top of image A.  You'll need to resize the width of your canvas to approx twice the horiontal dimension of the larger image to allow room for both.  This will be too much canvas for your exact needs right now, but later on, you can easily crop away uneeded canvas area.  I hope you're with me so far.

Now, select the top layer and change it's opacity to around 50% so you can see the bottom layer through it.  You can see both layers now and dragging the top one (or use arrow keys) to align with the underlying layer should be relatively easy. 

Afterward, return the opacity slider to 100% and see what you think.  If things aren't perfect, remember you still have rotate, transform, move, zoom, straighten (etc) tools available to best align the two layers.  Once you're happy with your work, Merge the two layers, then crop your completed document to remove unwanted canvas space.

I'll need to hand your Guided > Photomerge mystery off to someone else to assist with unless pressing ctl-k (cmd-k on Mac) and then clicking the button Reset preferences on next launch fixes it.  Hope you find this helpful.