The config option disable_merged_assets only affects JS includes.
This is obvious when comparing \Piwik\AssetManager::getJsInclusionDirective() to \Piwik\AssetManager::getCssInclusionDirective().
I'm not sure whether this was done on purpose. - If yes, the source documentation needs to be adjusted in various places (search the codebase for disable_merged_assets to see where it's mentioned). - If no, \Piwik\AssetManager::getCssInclusionDirective() should be extended in order to apply the setting,
Disabling merged assets for CSS is not easy because the less files need to be compiled. Can we at least discard the cached css when disable_merged_assets is set? That would cause the wanted effect that changes to styles are immediately visible.
If this is done, the setting name should maybe be changed.
I propose a different fix, that we invalidate the merged CSS only when it has changed. for this we must somehow parse the included css/less files. See: #4523