Searched the forums, didn't see a match for this issue already, apologies if its a dupe
Defect, was able to replicate 1x, will try again
1. start with a City at max merchants/routes
2. Have 1 merchant caravan destroyed by another faction/monster
3. Open city screen
4. stack queue with merchants, I did about 7-8 > cap
5. City will produce merchants until queue is complete, allowing nice merchant spam/gold burst