I understand the admins have decided to implement this feature to reduce the spam but has totally freazed all people ranks and also created a parallel market where people on telegram have started to sell their merit for money (that is worst than the account farming etc.).
It seems that you know something about it. They are abusing the new system hence reporting them to the admin will give them the punishment they deserved. If their ranks freeze, I think the problem there is their posting quality and not the system. If the spam posts is been reduced, then I think the new system is working fine.
But I guess the more you get, there will be a lot of merits to be given and that will be equivalent to spam posts that you give merit into someone even they don't deserve it since you have a lot of them, right?
You have a point since in our local thread, there are only some people that are releasing or giving their merit due to the fear of being banned because they thought that if they give some merit to someone, they might be red trusted for that which is not really true. Though, it is their merit and they can use it however they want to.
Every system needs an improvement but the system is still new and we need a little more time to consider that it needs to be improved or not, for now, let's just see what will happen.