Huh, interesting. Reading the main article on merge-sort, it says that
Sorting in-place is possible (e.g., using lists rather than arrays) but is very complicated, and offers little performance gains in practice, even if the algorithm runs in O(n log n) time. (Katajainen, Pasanen & Teuhola 1996) In these cases, algorithms like heapsort usually offer comparable speed, and are far less complex. Additionally, unlike the standard merge sort, in-place merge sort is not a stable sort.
I think the comparison table implies that in-place merge-sort is generally unstable, but the STL uses a stable in-place algorithm described in
this PDF.