The Smart Merge feature is used when DWG data is exported from ArchiCAD, the DWG is modified by another, then the same DWG is imported (merged) into ArchiCAD.
Is this what you want to do? This is a very old workflow, way before IFC.
If you just want to use a DWG that will have changes, place the DWG as Drawing. When the DWG changes just overwrite the source DWG of the placed Drawing and update the Drawing, its contents will reflect the latest DWG data.
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