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Merge Paths options

The Merge Paths path operation takes all of the paths above it in the same group as input. The output is a single path that combines the input paths. The input paths are still visible in the Timeline panel, but they are essentially removed from the rendering of the shape layer, so they don’t appear in the Composition panel. A fill and stroke are added after the Merge Paths property group in the Timeline panel if a fill and stroke are not already present; otherwise, the output path wouldn’t be visible.
Merge Paths options

A.
Add for all shapes

B.
Subtract for squares

C.
Intersect for squares

D.
Exclude Intersections for squares

The Merge Paths path operation has the following options, each of which performs different calculations to determine the output path:

Merge
Merges all input paths into a single compound path. This option is the default used for shapes created from text characters made up of multiple paths, like the letter e, when using the Create Shapes From Text command.

Add
Creates a path that encompasses the union of the areas of the input paths.

Subtract
Creates a path that encompasses only the areas defined by the topmost path, subtracting the area defined by underlying paths.

Intersect
Creates a path that encompasses only the areas defined by intersections between all input paths.

Exclude Intersections
Creates a path that is the union of the areas defined by all input paths, minus the areas defined by intersections between all input paths.