DesignMerge is not merging Links embedded inside a Variable Article
First, confirm the Variable Article Link is assigned to a text box or text frame, and has not been assigned instead to a selection of text. The ability to merge Links that are embedded inside a Variable Article's text file has been designed specifically for Variable Article Links that are used as Box Links in a document (a Box Link is a box or frame in the document that has been assigned to a Variable Link). Therefore, if the Article Link is being used as a Text Link, Links that are embedded inside the Article or text file will not be merged (a Text Link is text in the document that has been assigned to a Variable Link).
Also, the Variable Link's Link Type must be set to Article. If the Link Type is set to Text, then DesignMerge will treat the data as text for the document (the Link will display the filename instead of importing the named file).
Additionally, to embed Links inside an Article's text file, the file must be in your page layout application's Tagged Text File format. This format does not support anchored objects (in-line pictures or text frames). Therefore, Text Links are the only type of Link that can be embedded inside an Article's text file.
For more information about setting up an Article Variable Link and for an example of a Box Link and a Text Link, see Tutorial #1a (The Basics) in the DesignMerge Tutorial Manual, which is available in PDF format in the DesignMerge product folder on your system.
For more information about embedding Text Links inside an Article's text file, see the How do I embed Text Links in a text file for a Variable Article Knowledgebase Article.