There are two switches that will allow merging when users exist in the target domain. In my case the source and target account names were different, so I required an include file for ADMT, but for this preparemove I specified Identity using smtp address which it recognized in source and target and did the merge perfectly based on that.
-UseLocalObject followed by
.\Prepare-MoveRequest.ps1 -RemoteForestDomainController dc401.dc.contoso.com
-RemoteForestCredential $RemoteCredentials -LocalForestDomainController phiads001.dt.inc -LocalForestCredential $LocalCredentials -UseLocalObject -OverwriteLocalObject -Verbose -Identity email@example.com
VERBOSE: Local ad account with dupplicate proxy addresses found: CN=Woody Brown,OU=Users,OU=Philadelphia,DC=dt,DC=inc
VERBOSE: Merging Mailbox properties to local MailUser
VERBOSE: Setting msExchMailboxGUID to 136aef07-5869-415e-ae0e-bbe69963593b
VERBOSE: Setting proxyAddresses to x500:/o=DealerTrack/ou=Exchange Administrative Group
(FYDIBOHF23SPDLT)/cn=Recipients/cn=Woody Brown8d2 x500:/o=DealerTrack/ou=Exchange Administrative Group
(FYDIBOHF23SPDLT)/cn=Recipients/cn=Woody Brown753677056d53 X400:c=US;a= ;p=contoso;o=Exchange;s=Brown;g=Woody;
Appending x500:/o=contoso/ou=First Administrative Group/cn=Recipients/cn=wbrown to proxyAddresses of Object(CN=Woody Brow
n,OU=Users,OU=Philadelphia,DC=dt,DC=inc) in Local forest.
VERBOSE: OverwriteLocalObject specified. Updating MailUser with with attributes from source MBX(CN=Woody
VERBOSE: Setting displayName to Woody Brown
VERBOSE: Setting Mail to firstname.lastname@example.org
VERBOSE: Setting mailNickName to wbrown
VERBOSE: Setting msExchMailboxGuid to 136aef07-5869-415e-ae0e-bbe69963593b
VERBOSE: Setting countryCode to 0
VERBOSE: Setting givenName to Woody
VERBOSE: Setting Sn to Brown
VERBOSE: Setting textEncodedORAddress to c=US;a= ;p=contoso;o=Exchange;s=Brown;g=Woody;
Preparation for email@example.com done. Local recipient info Merged.
1 mailbox(s) ready to move.