The rule prevents you from having 3 sections in the y plane as already stated. In order to achieve an undercut you would therefore need to make the mid-wing narrower which is not possible due to the width of the SIS dictating the mid-wing width; it is fundamentally a SIS shroud
It's not a matter of blending surfaces cleverly like many of the tricks in this regulation set have appeared.. it's a simple part of the rules in terms of no. of sections. Merc would almost certainly already have 3+ sections in y plane if they could.
There is a simple reason they accept the compromise of running their intakes to the floor and not running any undercut of the sidepod which are negative aspects of the zeropod (mid-wing) concept.. these drawbacks would've been ditched long long ago if such simple workarounds as "blend it in" and start the undercut "after the mid-wing" were the solutions to merc's problems

It is groundhog day with this conversation
