It depends on your needs as a player. The big advantage to that first +1 merge is the arena scoring boost...but the Black Knight already has great arena scoring thanks to 1) high BST, 2) a legendary weapon, and 3) a 500 SP Special.
Personally, I'm going to merge him eventually...not because it's the best move strategically but because he's a favorite character of mine from the series and I want to get him as strong as possible. But I'm not promoting the 4* just to merge now as I have other higher priority projects ongoing.
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