Plexamp merging artists with similar, but different, tagged artist fields

It very much does.
Since Plex only allows one albumartist, this particular album is merged into all the other Beatles albums. In the Plex server database, it is now a regular Beatles album.
In the Plex server database, the Artist “Beatles” is only created once. At the time when the first album is scanned that is credited to the Beatles.
But since it is tagged as “Beatles and Tony Sheridan”, and you told Plex to prefer the content of the meta tags, Plex is using the content of the albumartist tag of that album because it somehow read it before the albumartist tag of any of the other Beatles albums.

Your files:
The Album Artist tag contains “The Beatles & Tony Sheridan”. As per my explanations above, this is what can end up as Artist name for all Beatles albums.
And they are both stored together in the same artist folder.

My recommendation would be to change the album artist tag to “The Beatles” even on that Sheridan album.
Then Plex Dance all albums within that artist folder.