Compiler throwing error on MERGE with invalid type argument

[Paul F. Dietz]

(compile nil '(lambda (x y) (merge '(nil) x y #'<)))

==>

bad thing to be a type specifier: (NIL)
   [Condition of type SIMPLE-ERROR]

Restarts:
 0: [RETRY] Retry SLIME REPL evaluation request.
 1: [*ABORT] Return to SLIME's top level.
 2: [REMOVE-FD-HANDLER] Remove #<SB-IMPL::HANDLER INPUT on descriptor 4: #<FUNCTION (LABELS SWANK/SBCL::RUN :IN SWANK/BACKEND:ADD-FD-HANDLER) {100A5B29FB}>>
 3: [ABORT] Exit debugger, returning to top level.

Backtrace:
  0: (SB-KERNEL::%PARSE-TYPE (NIL) #S(SB-KERNEL::TYPE-CONTEXT :SPEC (NIL) :PROTO-CLASSOID NIL :OPTIONS 0))
  1: (SB-KERNEL::BASIC-PARSE-TYPESPEC (NIL) #S(SB-KERNEL::TYPE-CONTEXT :SPEC (NIL) :PROTO-CLASSOID NIL :OPTIONS 0))
  2: (SB-KERNEL:SPECIFIER-TYPE (NIL) NIL NIL)
  3: (SB-C::CHECK-CONCATENATE (NIL) (#<SB-C::LVAR 1 {10019C9443}> #<SB-C::LVAR 2 {10019C9573}>) #<SB-C::COMBINATION :FUN #<SB-C::REF :LEAF #<SB-C::GLOBAL-VAR :%SOURCE-NAME MERGE :TYPE #1=#<SB-KERNEL:FUN-T..
  4: (SB-C::IR2-CONVERT-BLOCK #<SB-C::CBLOCK 1 :START c3 {10019C8BC3}>)
  5: (SB-C:IR2-CONVERT #<SB-C:COMPONENT :NAME "<unknown>" {10019CA803}>)
[...]