When you unlock potential for a merged unit, all the merge bonus stats gets lost because you reset to the base stat of the new rank.

I have a few duplicate characters. I'm wondering if I should unlock potential to 5 star, then merge all the 3,4 star duplicates into the 5 star.

Or should I keep the best 4 star and merge all the other 3,4 star duplicates into that one?

I'm not sure what the pros/cons are in either case, or when it's better to unlock potential vs merging when I have duplicate units.