Item entities will only merge if the entire stack can fit.

Example:

Toss 63 stone on the ground at once, and do it again. They will both have 63 Items and not merge.
Toss a stack of 2. There is now 3 entities, but only 128 items.

This can cause issues with there being slightly less than double the necessary item entities. I have had farms that due to the nature, produced stacks of 33 items at a time, which would not stack.