It varies per your requirements. But for things like media which doesn't often change - mergerfs isn't the "worst" idea possible. Especially if it's only going to be a handful of users at a time.
I've personally built my own NAS systems since 2005, and have gone through all the various things from every RAID setup I can shake a stick at (hardware, software or on motherboard, 0, 1, 5, 6, 10), as well as going the ZFS route and a few years ago BTRFS.
From my personal stuff (anecdotal so take some salt) the worst of the lot is RAID. Its redundancy is a complete joke in comparison to the other stuff.
If you want some in-between idea with less serious hardware requirements than ZFS, but better "safety" than RAID, then BTRFS is a usable option. If you do want some redundancy and the ability to heal corrupted files (they do happen and you only notice it too late).
But if all you're doing is serving media files, this feels a waste. And things like a union file system starts to make a lot of sense. It's definitely better than going for RAID 0.
For my own home media server, I've been running on some Union FS or other for more than 10 years. Originally using AUFS, but finding it less than stable. Moving to mhddfs and still not seeing a huge improvement. Both had this tendency of just stopping working and needing to be restarted. Around 5 years ago I moved to MergerFS - have yet to experience any issue with it.
Of course, you will have to make sure you either have good backups, or that all the files are easily replaceable. If something goes wrong with a disk, its data is gone (at least not like RAID 0 where all the data for everything is now in the void).
But I prefer having some means to recover / replace disks. It has happened every 2 to 3 years that I had to fix something. And in the MergerFS (and the others) idea I do add SnapRAID parity on as well - it has some benefits beyond just a RAID 5 or 6. Though do note, it is NOT recommended for a server where the files are going to change often. This also does add a "snapshot" idea as SnapRAID can recover files if they were deleted or changed - similar to what you get from the CoW in things like BTRFS - just periodic instead of real-time.
As a side note, I'm rather lazy. Have setup stuff from a command line before. But really, that's not my cup of tea. Of all the NAS-specific operating systems I've tried out to make my life "easier", I prefer Open Media Vault as it includes all the options listed above with a reasonably simple web interface.
As for if BTRFS works underneath MergerFS ... yes it does. MergerFS doesn't care what the underlying file system is. As long as it handles access control and attributes it works as designed. It may be a bit of a waster placing singular BTRFS disks underneath, but that's an option also - just that you lose most of BTRFS's benefits by not using some of its RAID-like features, meaning you might as well just use EXT4 instead.
