Add option to merge each reference to seperate model.
As merging file any link to source is lost(even element date is lost) then better approach would be to have it in seperate model so it is still is somewhat identifiable. Merge option is morally outdated as it has not changed from v7 era and there could be improvements. Manual approach is too troublesome as then need to create model then merge and repeat it for each file. Need it in base product.
Sounds like Make Direct Attachment already does what you need.