OS X 10.8.5
NVIDIA GeForce GT 650M 1024 MB
Broken: 2.74.5 hash c9f9e29
Worked: 2.74 (official release)
Short description of error
When the merge option of the mirror modifier is turned off it merges the vertices. If it's turned on it doesn't merge. So, the behavior is the 'reversed' of what should happen.
Exact steps for others to reproduce the error
Create an object with a mirror modifier and also apply a subsurf or solidify modier, to see the effect of the merging. Turn on and off the merge option.