Merino base layers are not really a "fad" just another useful product to have in the wardrobe. The ability for merino to retain warmth when wet is one of the characteristics that make it so great as base layer or to have 'next to skin'. There is a reason it's the preferred material for thermal underwear.
Other material may be better at not absorbing moisture but it still has to go somewhere. That may be the jersey itself or the inside of a jacket, which would still make you damp. So being able to retain warmth becomes an advantage. That it's naturally antibacterial and doesn't retain smells is another bonus.
It may not be for you but that doesn't mean it's a fad or not suited to its purpose.
I agree that the performance of a baselayer is limited by the mid/outer layers' ability to allow moisture to continue to move outwards.
BUT for a given jersey/jacket combination a merino baselayer will never perform as well as a synthetic one for any type of aerobic (or higher) activity. About the only thing merino does well (though still not as well as synthetics) is wick moisture, but once that moisture is absorbed into the garment it stays there. It doesn't insulate as well as modern synthetics (wet or dry), doesn't wear as well as modern synthetics, isn't as soft-touch as modern synthetics, and is usually more expensive to boot.
In regards to "warm when wet", kind of. But when you exceed 30% saturation (very easy to do on a hard ride) the already minimal exothermic (generates heat) properties drop off a cliff and just won't do as claimed anymore. Not to mention that this warmth is negated by a cold wind blowing at your body constantly from outside as you ride.
There is simply no substitute for dry when it comes to warmth retention.
There are also differences in whether the moisture hits the garment as steam (bodyheat) or liquid (sweat)... merino handles the former kind of OK... but won't be able to disburse liquid moisture anywhere near as quickly or uniformly as a synthetic textile.
The "does not retain odour" component is true but largely irrelevant - which in most cases is more misleading than false. Useful for multi-day hiking, camping, travelling but since when is odour as much of a concern for a cyclist (who isn't bike-packing)?
So hey, merino does do "stuff"... that's true, it's just that the stuff it does do isn't anywhere near as good or as useful as the "stuff" synthetics do.