I currently have two accounts. I would like to merge them.
My understanding is that if I were to merge the accounts, I could then play the characters all under one subscription. However, the achievements, mounts, etc. would all be lost from the account that would be considered the “merger”. Can anyone provide some clarity on the process? What would be the difference between consolidating the accounts and doing a paid character transfer?
Also, are items like challenge mode mogs character-specific or have they been made account-wide for the same class?
There is no “merging of accounts” actually. Not in the sense of making 2 WoW licenses function as only 1 (with a single sub).
If you are meaning that you have WoW licenses on separate Battle Net accounts, then the only thing that can be done is to request that Blizzard move 1 of the licenses over to the Battle Net of the other one.
Be aware though, that a VERY limited amount of items will be able to transfer with that license.
Also, be aware that you would still require separate subscriptions for both licenses (even under the same Battle Net login). Each Battle Net login can hold 8 WoW licenses.
While this example might not fit your situation exactly, it can give you an idea of how moving licenses works:
I did the MoP CMs on this character and my alt Warlock is able to use that set as well via the transmog library.
Also, the weapons from the WoD CMs are also account-wide.
However, both are still available for purchase from their respective vendors. If you do decide to move a license or character over to a different Battle Net account, I would recommend purchasing the physical gear pieces and bringing them along with you. That should make the appearances available on the new Battle Net account.