When you build a redesign on a copy of your theme, edits made to the live theme in the meantime are lost on publish. ThemeMerge compares both themes against a baseline you record when the copy is made, so it knows what each side changed. Theme editor JSON merges key by key, keeping sections added on either side. Liquid, CSS and JavaScript merge line by line. You decide the remaining conflicts, then download the merged theme to upload and preview. Your live theme is never modified.
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