Hi Martijn
I am running up-to-date EL7 hosts and was also disappointed to find Live Merge was not functional (yet).
As I understand it the live merge feature depends on some quite new features in libvirt and qemu which are only available at the moment in the Fedora virt-preview repo. More information at this link
http://www.ovirt.org/Features/Live_Merge. As to be expected libvirt and qemu packages provided in EL6 and EL7 will lag a bit behind upstream for good reasons such as ensuring things are well tested and proven reliable. I am sure Red Hat are very keen to get this much overdue feature into their RHEV product so I don't expect the wait for updated EL packages will be too long.
Regards
Paul