System Information
Operating system: Windows-10-10.0.22000-SP0 64 Bits
Graphics card: NVIDIA GeForce GTX 1060 6GB/PCIe/SSE2 NVIDIA Corporation 4.5.0 NVIDIA 472.12

Blender Version
Broken: version: 3.0.0 Beta, branch: master, commit date: 2021-11-03 21:09, hash: rB3e6907eb8a3d
Worked: 2.93.5

Short description of error
When merging all doubles of a mesh with Sharp Edges ticked, the results are not what one would expect in 3.0 as opposed to 2.93.5.

Exact steps for others to reproduce the error

1. In Blender, have a mesh with custom normals in the viewport. I provided both a sample .fbx and .blend file (initially saved in 2.93.5 to open in 3.0 and compare results) in this bug report to avoid any hassle.
2. In Edit Mode, select all vertices and merge all doubles.
3. Tick Sharp Edges whenever the bottom-left popup appears.

Video (left is 2.93.5, right is 3.0)

Other files