I know about Helm but I don't need k8s features and my VPS is just too weak for k8s I think :/

I actually need more than merging. For example, right now my traefik.template will look like this:

[http.routers.{{ router_name }}]
  rule = "{{ router_rule }}"
  service = "{{ service_name }}"
  middlewares = [{{ middlewares | map("tojson") | join(", ") }}]
{% block router %}{% endblock %}
  [http.routers.{{ router_name }}.tls]
    certResolver = "leresolver_http"

{% if service_host is defined %}
[[http.services.{{ service_name }}.loadBalancer.servers]]
  url = "{{ 'https' if service_use_https is defined else 'http' }}://{{ service_host }}{{ ':' ~ service_port if service_port is defined else '' }}"
{% endif %}

and then one of my traefik.toml could look like this

{% extends "template/traefik.jinja" %}

{% set router_name = "dozzle" %}
{% set router_rule = "Host(`dozzle.example.com`)" %}
{% set service_name = "dozzle" %}
{% set service_host = "dozzle" %}
{% set service_port = 8080 %}

I was using file merging, but one issue I found was that arrays don't get merged - and since switching to use Traefik (which is great) there are a lot of arrays in the config! And I've since started using labels for my own tooling too.

so you are also generating the docker-compose from code. I think I am looking for something that aware of both templating and docker-compose deployment because right now, at the end of the day, I am still have to run docker-compose up -f ... while helm can do both templating and deployment.

I dont think Ansible is a general templating engine ? I do templating for all most everything and not only docker compose, for example this for traefik configuration.

you mean nix the package manager ?