I know I asked about this a while ago, but I did get the answer through a lot of testing on Hydra. The answer, unfortunately, is NO.

I believe Merciless can only proc on the champ when it's their turn. I paired Mikage with Yumeko and Trunda. Yumeko and Trunda both in Merciless. Neither on the 14 uses of Mikage's A3 nor her 22 uses of her A1 did either Trunda or Yumeko get their Merciless CD Reduction.

The only good news is that with Shamael, using Mikage's A3 against Fear Head basically guarantees Lead Position gets to go next lol.

Hope this helps. If anyone ever sees differently please let us know (regarding Merciless 4 piece bonus)