Is it incorporating data from almost twice as many neighboring voxels through-plane as from within-plane?
Yes. The smoothing kernel is based on distance, not on voxels. However, if you want to make it be based on voxels, then you can use the "
-dxyz=1" option to 3dmerge, then specify the FWHM of the blurring in voxels.
"Isotropic" means "the same in all directions" -- in this case, the same physical distance.
bob cox