When you merge a subweb based on SharePoint Team Services from Microsoft or FrontPage Server Extensions 2002 to a parent web, it becomes another folder with web pages under in the parent web. You will lose no information on pages within the subweb; however, the subweb loses whatever unique permissions it might have had. Any subwebs below the merged subweb are promoted to subwebs under the parent web site.
Note You cannot merge a subweb if it contains document libraries or SharePoint Team Services-based lists such as discussion boards or task lists. If you want to merge a subweb that contains a list, you must first export the list to a spreadsheet program (such as Microsoft Excel 2002), then merge the subweb, and then import the list again. To merge a subweb that contains a document library, you must copy the documents out of the document library, delete the document library, merge the subweb, create a new document library, and then copy the documents into the new document library.