Works for me, steps I tried:
1) Click book number 5
2) Click book number 1
3) Select merge: Target book is book number 1
4) Click some other book
5) Click book number 1
6) Click book number 5
7) Select merge: Target book is book number 5
I agree D&D would be nicer, but IIRC there were some technical problems that made implementing it a little hairy, but it may be worth another look, open a bug report for it and I will get to it when I have the time.
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