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There is already a function of [Merge duplicate records] for accounts, contacts, or leads entity as confirmed on the following MSDN.
https://docs.microsoft.com/en-us/dynamics365/customerengagement/on-premises/basics/merge-duplicate-records-accounts-contacts-leads

However it's not available for other entities.
If user can use [Merge duplicate records] for custom entities as default function, it will make the process of manage the duplicate records on their environment much easier.
Category: General
STATUS DETAILS
Under Review
Ideas Administrator

Thank you for your feedback. This is a great suggestion! We will consider this in our roadmap.

Sincerely,
Paramita Chatterjee
PM, Microsoft.