Primary key failure with merge into...should not happen

Question

I get primary key constraint fail on this MERGE INTO sql.
Why? Shouldn't the merge into take care of this?
ORA-00001: unique constraint (NCSL.SYS_C001568) violated
MERGE INTO SessionTbl2 thistbl
USING
  (SELECT 'b2cdd2f30b786c329ad2f8d04d0e79e9' sessionid FROM dual) thistbl2
  ON (thistbl2.sessionid = thistbl.sessionid AND thistbl.varname=:varname)
WHEN MATCHED THEN
  UPDATE SET thistbl.varvalue=:variablevalue,
  thistbl.only_on_page=:onlyonpage,
  thistbl.expire_tstamp=:expire_tstamp,
  thistbl.inactivity_timeout=:inactivity_timeout,
  thistbl.readonly=:readonly
WHEN NOT MATCHED THEN
  INSERT (sessionid,varname,varvalue,tstamp,
  only_on_page,expire_tstamp,inactivity_timeout,
  readonly)          
  VALUES
  (:cacheidval,:varname,:variablevalue,:nowts,
  :onlyonpage,:expire_tstamp,:inactivity_timeout,
  :readonly)

Answer 1

As you say, this should not give a problem then, but the only way to be sure the system is doing what you believe it should do is to use the same variables in the test and in the insert statement. The bind variable depends on the programming language you use and may pass something else than the string that oracle generates in the select from dual. I do not say it will be as such, I just want to make sure that this is not the problem. I have seen things like this before and you keep on looking in the wrong direction for a solution.
Peter