Olivia Merging?

Well, 4+10 is basicly 5+5.
You won't reach her max potential, but it'll save you a lot of feathers.
And since she's a dancer, the max potential doesn't matter that much.

You will have to inherit a weapon from a 5* unit though. She won't have one otherwise.

Olivia is a dancer, and her role is to support your team, not to engage in combat.

You can promote her to 5* and refine her weapon to give her better bulk or speed, but in my opinion is not worth it to spend a lot of resources in her (merges) unless she is your favourite unit.

When red duel infantry comes out, Olivia will be high tier arena again. The lack of a (solid) A-slot doesn't hurt her as much, because, as other have stated, she is not meant to engage in much combat. And you can give her something like Barrier Blade to make her very tanky (perfect for softening up targets for your bonus unit to pick off).

As above, dancers do fine as 4*+10 and if you end up with an overstock of pitybreakers, fodder a 5* weapon to her. I got 3 Karels in close succession once so she got a Wo Dao+ (+Spd) so, with Fury 3, she has 40/47/44/31/30 so she's fast and can easily take a hit or two while dishing out +10 damage Moonbow if she needs to fight. While she'll never be an excellent offensive units, she is an excellent support unit who can fight if needed.