While I figure out a fix for the missing characters...
Enclosing the whole merging loop in parentheses and replacing the source file with the entire output at once is more efficient than appending individual lines with >>%~2. The script doesn't have to wait for the HD to continue processing.
Everything in a line after a powershell call is considered as being called from PowerShell.
>nul didn't work because of that. Enclosing the line in brackets should fix it.
To account for the possibility of the user running the script silently in the background. PAUSE would leave an instance in memory doing nothing indefinitely.
I was going to use TIMEOUT but PING performs better.