Fix!: exp.Merge condition for Trino/Postgres

sqlglot/dialects/dialect.py

@@ -1570,19 +1570,25 @@ def normalize(identifier: t.Optional[exp.Identifier]) -> t.Optional[str]:
         targets.add(normalize(alias.this))
 
     for when in expression.args["whens"].expressions:
-        # only remove the target names from the THEN clause
-        # theyre still valid in the <condition> part of WHEN MATCHED / WHEN NOT MATCHED
-        # ref: https://github.com/TobikoData/sqlmesh/issues/2934
-        then = when.args.get("then")
+        # only remove the target table names from certain parts of WHEN MATCHED / WHEN NOT MATCHED
+        # they are still valid in the <condition>, the right hand side of each UPDATE and the VALUES part
+        # (not the column list) of the INSERT
+        then: exp.Insert | exp.Update | None = when.args.get("then")
         if then:
-            then.transform(
-                lambda node: (
-                    exp.column(node.this)
-                    if isinstance(node, exp.Column) and normalize(node.args.get("table")) in targets
-                    else node
-                ),
-                copy=False,
-            )
+            if isinstance(then, exp.Update):
+                for equals in then.find_all(exp.EQ):
+                    equal_lhs = equals.this
+                    if (
+                        isinstance(equal_lhs, exp.Column)
+                        and normalize(equal_lhs.args.get("table")) in targets
+                    ):
+                        equal_lhs.replace(exp.column(equal_lhs.this))
+            if isinstance(then, exp.Insert):
+                column_list = then.args.get("this")
+                if column_list is not None:
+                    for column in column_list.find_all(exp.Column):
+                        if normalize(column.args.get("table")) in targets:
+                            column.replace(exp.column(column.this))
 
     return self.merge_sql(expression)
 

tests/dialects/test_dialect.py

@@ -2336,6 +2336,17 @@ def test_merge(self):
             },
         )
 
+        # needs to preserve the target alias in then WHEN condition and function but not in the THEN clause
+        self.validate_all(
+            """MERGE INTO foo AS target USING (SELECT a, b FROM tbl) AS src ON src.a = target.a
+            WHEN MATCHED THEN UPDATE SET target.b = COALESCE(src.b, target.b)
+            WHEN NOT MATCHED THEN INSERT (target.a, target.b) VALUES (src.a, src.b)""",
+            write={
+                "trino": """MERGE INTO foo AS target USING (SELECT a, b FROM tbl) AS src ON src.a = target.a WHEN MATCHED THEN UPDATE SET b = COALESCE(src.b, target.b) WHEN NOT MATCHED THEN INSERT (a, b) VALUES (src.a, src.b)""",
+                "postgres": """MERGE INTO foo AS target USING (SELECT a, b FROM tbl) AS src ON src.a = target.a WHEN MATCHED THEN UPDATE SET b = COALESCE(src.b, target.b) WHEN NOT MATCHED THEN INSERT (a, b) VALUES (src.a, src.b)""",
+            },
+        )
+
     def test_substring(self):
         self.validate_all(
             "SUBSTR('123456', 2, 3)",