Roust_m,
если вам лень открывать мсдн, то пишите
автор[ WITH <common_table_expression> [,...n] ]
MERGE
[ TOP ( expression ) [ PERCENT ] ]
[ INTO ] <target_table> [ WITH ( <merge_hint> ) ] [ [ AS ] table_alias ]
USING <table_source>
ON <merge_search_condition>
[ WHEN MATCHED [ AND <clause_search_condition> ]
THEN <merge_matched> ] [ ...n ]
[ WHEN NOT MATCHED [ BY TARGET ] [ AND <clause_search_condition> ]
THEN <merge_not_matched> ]
[ WHEN NOT MATCHED BY SOURCE [ AND <clause_search_condition> ]
THEN <merge_matched> ] [ ...n ]
[ <output_clause> ]
[ OPTION ( <query_hint> [ ,...n ] ) ]
;

Roust_mДа, я нашел как правильно сделать, надо было OUTPUT перемместить и использовать "UPDATE" в качестве фильтра, тогда все будет писаться как надо:
INSERT INTO [dbo].[_test_history]
SELECT [id],[assessment_id],[name],[seq_no]
FROM
( MERGE [dbo].[_test] AS t
USING (SELECT [id], [assessment_id],[name],[seq_no] FROM [dbo].[mytable]) AS src ([id], [assessment_id],[name],[seq_no])
ON t.id = src.id
WHEN MATCHED
THEN UPDATE SET t.[assessment_id] = src.[assessment_id], t.[name] = 'test', t.[seq_no]= src.[seq_no]
WHEN NOT MATCHED THEN
INSERT ([id], [assessment_id],[name],[seq_no])
VALUES ([id], [assessment_id],[name],[seq_no])
OUTPUT $action, deleted.[id], deleted.[assessment_id], deleted.[name], deleted.[seq_no]
)
AS Changes (Action, [id], [assessment_id], [name], [seq_no])
WHERE Action = ' UPDATE ';
святая корова.....