The Merge Rasters function represents a grouped or merged collection of rasters. It is useful when you have multiple rasters that you want treated as a single item, for example, to calculate the same statistics for all, or to treat as one image when color balancing (thereby, not color balancing each image separately). This is useful for some satellite imagery that is stored as different tiles to reduce the file size of each, but should be considered part of the same image.
This function may be inserted automatically for some imagery, and it cannot be directly inserted into the function chain. To use this function, you need to open the attribute table and select the rows in the table representing one image, then right-click the Footprint layer and click Selection > Merge Selected Items. The selected items will be converted from individual items into one new item (row) in the mosaic dataset's attribute table. If you open the properties for this item (by clicking the arrow in the Raster field) you can view the Merge Rasters function in the function chain.
You can remove this function by selecting the item in the attribute table then right-click the Footprint layer and click Selection > Split Merged Items.