2K8R2: Merge statement bug? A severe error occurred on the current command. The results, if any, should be discarded.

version is:

Microsoft SQL Server 2008 R2 (SP1) - 10.50.2811.0 (X64)   Apr  6 2012 01:59:29   Copyright (c) Microsoft Corporation  Enterprise Edition (64-bit) on Windows NT 6.1 <X64> (Build 7601: Service Pack 1) (Hypervisor)

I'm just playing around with the merge statement to see if i can get it to work on a CTE that includes computed fields/constants/groupings and aggregates. And yes it does! BUT it craps itself if you try to look at the output clause

Has anybody come across this or have a way around it? anyone on later versions of 2k8r2 or 2012 that can give it a test?

create table #src (id int, val decimal(18,9))
go
create table #dest (id int, val decimal(18,9))
go
-- ignore complexity, i was trying to test something else when i noticed this issue... this is just generating 10 rows with a random decimal value
insert into #src
SELECT top 10 
ROW_NUMBER() over (order by getdate())
,right(reverse(stuff(reverse(abs(cast(CAST(NEWID() AS varbinary) as bigint))),10,1,'.')),13)
FROM sysobjects
-- merge here
-- first cte that generates the aggregate
;with cte as (select id, SUM(val) val from #dest group by id)
-- 2nd cte that we use as the target
,cte2 as (select x.*, cte.val AS summedval from #dest x inner join cte on x.id = cte.id)
MERGE cte2 AS Target
USING #src as Source
ON (Target.id = Source.id)
WHEN NOT MATCHED BY TARGET THEN
INSERT (id, val)
values (Source.id, Source.Val)
WHEN MATCHED AND Target.summedVal <> source.val THEN
update SET val = 1
OUTPUT
INSERTED.id,inserted.val;

Works fine without the output clause. Add the output clause and get booted/disconnected with the following message: