It's not that it's incorrect, it's that it's pointless. The entire point of a linked list is that you don't move around the data, you just re-link nodes. So any sane algorithm that works on linked lists is already "in-place" by default; an out-of-place merge on a linked list would be pure madness. So saying that an in-place merge can be performed on a data structure that already has some overhead and which already performs everything in place is not a very insightful or useful observation.