I know up to 3 rooms can merge together. I'm low on money so I can't risk it to build a 4th one. Will the 4th one merge too or is it only 3?
A maximum of 3 rooms can merge together. A fourth room will start its own group and not merge with the others.
Also since rooms need to be the same upgrade tier to merge together, it is cheapest to merge 3 basic rooms and then upgrade the merged room (500 caps) rather than upgrading three single rooms (250 caps each = 750 caps).