Can I merge table rows in markdown

No, this is not possible with GitHub-Flavored Markdown. As the spec explains (emphasis added):

The remainder of the table’s rows may vary in the number of cells. If there are a number of cells fewer than the number of cells in the header row, empty cells are inserted. If there are greater, the excess is ignored:

Of course, you can always fall back to raw HTML. In fact, GitHub includes the rowspan (and colspan) attribute on their whitelist.

<table>
    <thead>
        <tr>
            <th>Layer 1</th>
            <th>Layer 2</th>
            <th>Layer 3</th>
        </tr>
    </thead>
    <tbody>
        <tr>
            <td rowspan=4>L1 Name</td>
            <td rowspan=2>L2 Name A</td>
            <td>L3 Name A</td>
        </tr>
        <tr>
            <td>L3 Name B</td>
        </tr>
        <tr>
            <td rowspan=2>L2 Name B</td>
            <td>L3 Name C</td>
        </tr>
        <tr>
            <td>L3 Name D</td>
        </tr>
    </tbody>
</table>

Try it yourself at https://jsfiddle.net/7h89y55r/