A family of Microsoft word processing software products for creating web, email, and print documents.
Your problem is caused by the use of AM\PM instead of am/pm in the switch. Word interprets the combination of \ and M as a month switch.
Hence, you should have:
MERGEFIELD FINAL_START @ "h:mm am/pm
See Mailmerge Time Formatting in the Mailmerge Tips & Tricks page at: Mailmerge Tips & Tricks (msofficeforums.com)