So, it means that the merchant wouldn't be able to make another txn with the bitcoin that I gave him until unless there is at-least one confirmation..?
They can, but it would be a very bad idea. Since your transaction might disappear and cease to exist, then if they choose to spend your transaction, that means that their transaction might also disappear and cease to exist.
kind of..
but what danny is describing as 'bad' is actually CPFP child-pays-for-parent. a future mining pool feature that prompts a mining pool to push the first transaction into the next block by raising the first transactions priority because the second transaction has a generous fee to so that both transactions to be deemed high priority.
CPFP is 'supposedly' meant to attempt to help merchants who receive funds with 0 fee(low priority), to then 'spend' that unconfirmed tx to another address they also own by adding a fee which is enough to make the first transaction a priority and 'hopefully' get the first tx into the next block before the customer tries to double spend.
the downside is that the customer can also use CPFP to do the same thing and pay themselves (double spend) using the exact same tactic. so CPFP is not a guarantee to prevent double spends. but atleast allows a merchant an oppertunity to raise the priority to speed up which block it will get confirmed in, to reduce the chances of a double spend.
but as i said the customer can do the same thing. so its still a case of fastest first and highest fee first winsIf he can do the same thing, then this whole effort is meaningless. If the customer is not going to make a try at double-spend, this would only incur additional expenses (time and money wise), and if he does try (he will obviously try what's best to get there), this as you said won't change a thing