In the Harry Potter universe, Merlin is well regarded as arguably the Grand-Daddy Poobah of Wizards, having a number of honors named after him, including chocolate frog cards.
There are a lot of sources of the history of Merlin in the Potter-verse; for a quick rundown, this theory video does a good summation:
In the Potter-verse, it was said that he studied under Salazar Slytherin... but this contradicts the "real world" history of Merlin being born to a human noble woman, and sired by a supernatural entity/dark mage. Slytherin was infamous for his "pure blood" fanaticism, and even created the Chamber of Secrets as a means to remove Muggle-borns from the school. This would be nonsensical, given the canon-acknowledged "most powerful wizard of all time" not only came from that house, but was at least implied to be half-blood.
All of this provokes the questions:
1. Was Merlin in the Potter-verse a half-blood, and is there any (canon) source to support or disprove this?
2. If he was half-blood, how can "Mudblood" prejudice be "a thing" when the GOAT of the Wizarding world himself was a half-blood?
3. Even if Merlin wasn't half-blood, his Order was founded on the very basis of creating laws to protect all humans, magical and non magical, and using magic to benefit both. Why then do "pure blood" wizards overlook this if its canonically on record that this is what their top Wizarding legend aspired for the magical world to be?