No other effect in the game has you choose something as discussed here reutwit and then merging.

The issue is that if this were true, the effect from both outwits should end since you're not showing outwit from the original dial source which generated the outwit. That means that both outwits are no longer in effect AND if you outwitted with either of the figures pre-merge, the game effect of already using outwit as a free action transfers and you can't use the outwit on the duo figure.

Honestly, I can see either side. I'll check to see, but I would say that consistency results in you having one being lost.

True, but how about this case:

I am playing 2 mole-man's. Let's call them B and C for ease of understanding. I have it set up so that they are all in a straight line with 3 squares between the pair. There is an opposing character X that is 10 squares away from C.

B---C---------X

C uses Outwit on X. B Mind Controls C to use Outwit a second time again on X. How many powers on X are countered? 2. Again, I propose that Outwit itself has no limit on how many powers it can be used to counter, rather the number of powers it can counter is limited by the number of times it may be used.

I can go with this ruling as well. It seems like the harshest, but its also clean. We either still have the original 2 effects from Outwit, because the properties (in this case the target of the Outwit) of the merged figures transfer to the replacement figure, or the original 2 sources of Outwit are both lost since neither of those figures are still on the board and thus, their effects would end.

I like the other way I see it - that both outwits stick but if I can't have my ball, no one can have my ball...

I think if we look at Outwit as a free action and a countered power as a game effect - it's easier to argue that if 2 figures use outwit as a free action that the game effect of a power being countered is now in play and that if they merge that both a.) the game sees that the figure has already used outwit as a free action [the new figure cannot use this power again] and b.) a game effect is in place to counter 2 powers.

Obligatory "just making sure this hasn't been forgotten" nudge.