ITOM recommending to all customers to disable MergeOutCache?

In the recent versions of vertica, reflexive Mergeout was introduced which is more efficient. When reflexive mergeout is enabled, mergeout cache should be disabled. Are you using recent version of vertica?

Current versions of ITOM products support Vertica Enterprise Mode 12.0.1 and 11.1.1-5 or later patch versions.
Most of my systems seem to have ReflexiveMoveout set to 0/false, one that had been upgraded from 10.x has it set to 1/true. The default for MergeOutCache seems to be 1/true.
The vertica docs themselves are very unclear about how ReflexiveMoveout relates to MergeOutCache.
Apparently when I change this:
select set_config_parameter('ReflexiveMoveout',1);
then I should also change this:
select set_config_parameter('MergeOutCache',0);
but my question remains why aren't these "better" settings simply the default?

MergeoutCache is deprecated after ReflexiveMergeout feature was introduced. so both cannot be enabled at same time. it was a known issue and fixed in 10.1

I see that you mentioned ReflexiveMoveout. Since WOS has been deprecated, moveout is no longer needed.

You need to enable ReflexiveMergeout to use the new feature.

https://www.vertica.com/docs/ReleaseNotes/10.1.x/Vertica_10.1.x_Release_Notes.htm#10.1.0

VER-74707 Tuple Mover Enabling both mergeout caching (deprecated) and reflexive mergeout adversely affected performance on a new or restarted database. This issue has been resolved: when reflexive mergeout is enabled, mergeout caching is automatically disabled.

I mentioned ReflexiveMoveout only because that is the only match when I searched for the keyword "reflexive" in Vertica 12 docs. There is no ReflexiveMergeout configuration parameter, but I see something similar via this sql:
select * from vs_configuration_parameters where parameter_name ilike '%reflex%';
So there is a (undocumented) EnableReflexiveMergeout parameter. It seems to always be set to 1/true.
So I remain confused: Sticking to Vertica 12, it appears that by default both MergeOutCache and EnableReflexiveMergeout are true.
I guess, perhaps, you are saying that in Vertica versions after 10, the setting for MergeOutCache is ignored and there is no effect of setting it to 0? And, EnableReflexiveMergeout should be left to the default of 1?
None of this documented for customers?

Yes. Mergeoutcache will not have any impact as that feature is deprecated. as long as ReflexiveMergeout is turned on you should be good.