Merit sources are the only ones bound to rules, people are free to do whatever they want with their own merits if they are not a merit source. If User A wants to give User B 500 merits for liking lemons (sorry had to do it) they are free too, because they earned the SMerits they have. If they are using the Smerits given to them by the forum as a pillar of the merit system to award to people for reasons laid out before applying as a merit source, they are held to higher scrutiny.

Example: Merit sources cannot sell merit. Non merit sources can sell merit, but people will negative tag them.