Dear SurbhiAgarwal,
Good day. Thank you for posting to Microsoft Community.
As per your description, Loop can’t merge correctly. Based on my test with my colleague, I reproduce the same situation with you. It seems a normal phenomenon, when you edit the same column with your friend, it will cause some confusion in wording. I think this is due to the fact that Loop's co-authoring feature is not yet very complete.
To avoid this phenomenon, I recommend that you communicate with your friends in advance before editing. Also, I recommend sharing your valuable feedback to Loop Feedback Community: Loop · Community (microsoft.com). Our Product Team is in-charge of the site, and they are constantly checking the comments and feedback from our customers. Many features have been developed and improved based on users' comments.
Thank you for your patience and understanding.
Sincerely,
Claire | Microsoft Community Moderator