Maybe this will help maybe not, just write it on paper or white board and iterate as you would on a computer. It helped me to solve the banana one. Still got one more random always failing.

Just wrote an algo today and I was very confident it would pass all.
Bananas and the random test are edge cases, and as Abbe mentioned very tricky. I have to rethink my algorithm now.

You could always use print to print things. Try the following:

def is_merge(s, s1, s2):
    print('s:', s)
    print('s1:', s1)
    print('s2:', s2)
    ...

That being said, the 'Bananas from Bahamas' test is tricky. It's why it's a 5 kyu kata. :-)

Good luck and let me know if I can help you more!