MacOS – Why is this folder 4.2mb? It only has a handful of relatively small text files in it!

The merge option will only show up if you are copying (rather than moving) the folder. Make sure you hold option while you drag the new folder to the location of the old folder. Alternatively, using ⌘+c to copy the new folder and ⌘+v to paste over the old folder should give you the option to merge the files.

This is the standard permissions configuration and has been around since the beta days of Mac OS X when Unix underpinnings were established for Apple’s new computer OS.

The root of your home folder is global read, but standard macOS folders within such as Desktop and Documents should be global no access. Feel free to set the permissions of other folders which you create in the root of your home folder to match the permissions on the standard folders.

If you wish new folders to, by default, be global no access, change the permissions on the root of your home folder, propagate the permissions recursively and set up ACLs to inherit permissions for new folders, however I am unsure as to any effects this may have.