Zachary first decomposed the collected Merfolk blood in the Cave and, after confirming that its effect on enhancing the Cave was minimal, he realized that the Merfolk were not the target of his search after obtaining the same results from the deceased Merfolk.
The decomposing ability in the Cave only worked on dead matter and could not decompose living organisms, but it could directly decompose undead creatures. Although Zachary did not understand the principle behind this, it did not affect his normal use of the Cave.
As for the Merfolk whose arms Zachary had severed, after bringing them into the Cave and seeing no reaction, it indicated that the upgrade requirements for the Cave were not related to the number of species living within it.
Moreover, since Zachary had no inclination to collect biological species, he sent the rest of the Merfolk, including the one whose body was intact, directly to the Realm of the Undead.