I'm seeing the same issue, but wanted to chime in on what I think is actually happening. When merging two contact records, the activities from the subordinate record are actually moved to the chosen master record (it doesn't create any new activities). You can verify by looking at the created dates on activities after merging two records with activities. The problem is when these activities are moved, the "modified date" and "modified by" change to today's date and the person doing the merging, which it probably should do... It is technically being modified because it's associating the activity with a different contact record. But, in the activities tab on the contact record, it references "modified date" as the completed date. Normally that works because you can't normally modify a closed activity. And "completed by" in the activities tab is referencing "modified by". There is no true "completed by" field on activities, so you really are losing that data forever when merging records. So, I don't think there is a setting you can change to fix this. Microsoft should instead reference "actual end" date to show when an activity was completed in the activities tab. This date field already exists, and does not change upon merging contact records. Open activities should probably still reference "modified on" though. They should also add a new "completed by" field to activities that gets populated upon complete and remains unchanged. Until then, the activities tab won't be a great reflection of who did what and when after contacts are merged...
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