It's a way to share files across seeders/peers of different torrents, as long as the torrents contain at least one identical file. For example, let's say that:

• you're downloading torrent1. It shares the files A and B. You got A already, but since the number of seeders dropped considerably, you're having a really hard time downloading B.
• there's also torrent2, sharing files B and C. Fairly active, with lots of seeders.

Without swarm merging, you're stuck waiting for new seeders or peers from torrent1 that have the file B. With swarm merging, your torrent program will get the file B from people sharing torrent2 too.

I recall this feature from Vuze; but apparently BiglyBT also uses it.