Local Merge Argument definition not found - terraform

Question

I am attempting to merge my tfvars values into a locals block, but it appears the merge is not working. For example, I put the location value in the tfvars to null and based on the code, in that case, it should instead choose the location of the Resource Group. I get an error of "The argument location is required, but no definition was found." Makes me feel that the whole merge is not happening at all.
Similarly, the merge of the tags is not working.
Does the merge only work for values that don't exist in the tfvars or can it take existing values, run logic on them, and produce the output? Maybe my whole idea of the merge is wrong if it cannot do the latter.
Any help appreciated.
According to the documentation: "If more than one given map or object defines the same key or attribute, then the one that is later in the argument sequence takes precedence."
##Data Source for Resource Groups
data "azurerm_resource_group" "resource_groups" {
for_each = { for law in var.log_analytics_workspace : law.name => law }
name = each.value.resource_group_name
}
###LOCALS###
locals {
laws = { for law in var.log_analytics_workspace : law.name => merge(
{
location = law.location != null ? law.location : data.azurerm_resource_group.resource_groups[law.name].location
sku = coalesce(law.sku, "PerGB2018")
retention_in_days = coalesce(law.retention_in_days, 30)
daily_quota_gb = coalesce(law.daily_quota_gb, 1)
internet_ingestion_enabled = false
internet_query_enabled = false
cmk_for_query_forced = false
reservation_capacity_in_gb_per_day = law.sku != "CapacityReservation" ? null : law.reservation_capacity_in_gb_per_day
tags = merge(data.azurerm_resource_group.resource_groups[law.name].tags, law.tags)
}, law)
}
}
#Log Analytics Resource
resource "azurerm_log_analytics_workspace" "log_analytics_workspace" {
for_each = local.laws
name = each.value.name
resource_group_name = each.value.resource_group_name
location = each.value.location
sku = each.value.sku
retention_in_days = each.value.retention_in_days
daily_quota_gb = each.value.daily_quota_gb
internet_ingestion_enabled = each.value.internet_ingestion_enabled
internet_query_enabled = each.value.internet_query_enabled
cmk_for_query_forced = each.value.cmk_for_query_forced
reservation_capacity_in_gb_per_day = each.value.reservation_capacity_in_gb_per_day
tags = each.value.tags
}
log_analytics_workspace = [
{
name = "law-eastus-dev-01"
resource_group_name = "rg-eastus-dev-01"
location = "eastus"
sku = "PerGB2018"
retention_in_days = 7
daily_quota_gb = 1
reservation_capacity_in_gb_per_day = 100
tags = {
law = "dev-east"
}
}
]
Changes to Outputs:
+ laws = {
+ law-eastus-dev-01 = {
+ cmk_for_query_forced = false
+ daily_quota_gb = 1
+ internet_ingestion_enabled = false
+ internet_query_enabled = false
+ location = "eastus"
+ name = "law-eastus-dev-01"
+ reservation_capacity_in_gb_per_day = 100
+ resource_group_name = "rg-eastus-dev-01"
+ retention_in_days = 7
+ sku = "PerGB2018"
+ tags = {
+ "law" = "dev-east"
}
}
}