Just reporting this bug as suggested by GM Spoom. I was attempting to hire my 4th Merc and although I had an "empty" slot, all merc vendors that I tried gave me the same response - "You already have the maximum number of mercenaries. You must dismiss one ..... " Wasn't able to resolve this problem. And to reiterate, I do have an emply slot for a an additional merc.
Ive seen this somewhere before and I thought it had to do with spam removing all mercs even after they are all gone until you can purchase another.