[Graham Boak]

I think I can answer one of the three: the Merlin engines have additional side area forward of the c.g, which is destabilising. The propellers are further forward, also destabilising. Hence the poorer handling. This was largely restored by adding dihedral to the tailplane, thus providing additional side area aft.

For the second: I suspect that the Merlin XXs were simply less powerful than the Hercules, at least at lower level. At higher altitude they would be superior, but the German bombers of the period would be below the optimum altitude for the Merlin XX.

For the third: this may be because the Hercules was delayed in production because of problems with the sleeve valves. Alternatively, (or additionally), it was considered useful to have alternative sources of production in case of supplies of one engine being cut by German bombing. I don't know which was considered the most important.