assign works: For each property in source, copy its value as-is to destination. if property values themselves are objects, there is no recursive traversal of their properties. Entire object would be taken from source and set in to destination.
merge works: For each property in source, check if that property is object itself. If it is then go down recursively and try to map child object properties from source to destination. So essentially we merge object hierarchy from source to destination. While for
assign, it's simple one level copy of properties from source to destination.
Here's simple JSBin that would make this crystal clear: http://jsbin.com/uXaqIMa/2/edit?js,console
Here's more elaborate version that includes array in the example as well: http://jsbin.com/uXaqIMa/1/edit?js,console