There's no way to know what action one needs to take in order to make merges happen on duplicate accounts. The error message does not give any hint of what further action is necessary. I end up going into the duplicate accounts and removing the user.
Ugh, this message is so frustrating. I find myself chasing around through various modules looking for errant forms, relationships, etc. It would be so helpful if there were a link or some indication what action should be taken.
You were luckier than me. When I tried to do that, I got the message "To permanently remove this student all school registration rows must be deleted first. An alternative is to withdraw him/her and assign the Past Student role." Wouldn't it be nice if it asked to delete those registrations? Just a thought...