The Merge ability in the Player's Guide includes the following:

"Game effects assigned to the individual characters pass to the
Duo."

If I began the game with DKR100 Batman and a qualifying Gordon for his trait:

"We're In This Together: When you build your force, if there is
another character on your force named Sgt. Gordon, Lt. Gordon
or Commissioner Gordon, then Batman possesses the Police
keyword and team ability and that character possesses the Batman
Ally team ability. If Batman is adjacent to that character, they each
get +1 to their attack (if not already modified by this effect)."

And I used Merge to combine that Batman with a Catwoman to form the Batman & Catwoman duo - would the Duo retain the Police Keyword and Team Ability? Would Gordon retain the Batman Ally team ability?

For that matter (ignoring the Split/Merge issues) would Gordon lose Batman Ally as soon as Batman was KO'ed in a game?

Thanks!

While you transfer assigned game effects to the merged character, the bonus from starting with gordon is a trait of the batman you are using to merge rather than an assigned game effect. So, no he would not get the police TA as the duo. If you had a gauntlet or utility belt assigned, that would get transferred to the merged unit, but the bonus from the trait would not.

Ah. Followup question then: would a figure who has been targeted with Abin Sur's Passing the Power retain the bonus if they merge into a character that is over 150 points? Say DC75 superman at 120 (targeted with Passing the Power) and another Superman merge into Superman & Superman?

"Passing the Power: When Abin Sur is KO'd, choose a friendly
character that's 150 points or less. For the rest of the game,
modify that character's attack and defense values by +1."

Yes the Duo would get the bonus.

Replacement characters are considered the same character for all purposes like Abin Sur's trait. The reason batman's trait wouldn't carry over is because when the trait is lost, the effect ends. Abin Sur's trait specifically says that it lasts after he is dead (because otherwise it could not work at all) so it does stick around.

Do feats assigned to the single figs also carry over to the duo fig after they merge?

Yep.
Everything transfers. They are considered the same character.