I just started using PS CC (Mac, v14.1.2) and tried out Photomerge with a set of 40 (4 rows, 10 cols) raw images (Pentax PEF format), resulting in a 0.3 gigapixel image.
When I have them stitched by Photomerge, I see fine white lines at the merge points.
I had enabled all 3 options (blend images together, vignette removal, geometric distortion correction), using cylindrical layout.
When I first convert the PEFs to TIFFs and use Photomerge with the same options, there are no such white lines.
An example of the bad output:
These unwanted lines are, of course, at the edges where the images are getting joined.
Also, when using only a few images (2x2 or 3x3, or even 4x5), I do not get this effect.
I noticed that when using less images, the blend masks' edges are not straight - but they are when I see this issue. This suggests that at some point the merge operation gets overwhelmed and switches to a simpler algorithm, which in turn has this "bug" with RAW images, apparently.
Is this a known issue, and is there a way to get this working right with this many RAW/PEF images?