When you merge there is an option to Merge Materials. Merging materials also merges the texture maps. A 2k texture will fit 4 merged objects by laying out the textures in a 512 grid, 8 objects at 256px grid etc. to fit into the 2k map.
You can view this yourself by looking at the new textures in your content-browser. They will be aligned in a grid-like I have described.
EDIT: AFAIK To avoid this, you must combine your mesh outside of unreal and manually refit the UV’s so you have one 2k texture for your whole object, otherwise you have to deal with the loss of quality as your texture is compressed to fit into the grid.