I found various blogs and forums discussing the Excel merging cells issue while exporting SSRS report to Excel. I found a simple and logical reason behind the issue.
In the above design consider Report Header Textbox with Grid in the details part. If Header Textbox does not align with Grid columns, Excel will start merging the difference of columns which is shown by red line in the picture. However, if you get it align with Grid column Excel will start a new column as there will be no difference in columns indicated by green line.
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