Kane suffered an injury scare during the 6-2 win over Iran, in which in supplied two assists, but was declared fit to start in the drab 0-0 draw with USA just four days later.
The captain provided another assist in the 3-0 win over Wales but Merson remains unimpressed and feels Kane could have done with a rest as England enter the knockout stages.
"Harry Kane just loves to play football but I really think he would have benefited from sitting out against the USA or Wales," Merson told the Daily Star.
"He is now seriously lacking sharpness.
"He may have the most assists at the World Cup but England need him in the box. There is simply no chance Gareth Southgate’s side will win the tournament without Kane in the goals.
"But I just feel like with his fitness at the moment, he needs to sometimes consider saying: 'You know what, I can’t play in this game.'
Wales v England FIFA World Cup 2022 Qatar | Group B Match | 29th November 2022
"You only have to look at Tottenham’s recent League Cup defeat at Nottingham Forest to realise Kane wants to play in every football match but now he doesn’t look 100% fit.
"Sometimes you become a better player when you’re not in the team and that would have been the case against the USA or Wales.
"All of a sudden there are calls for Callum Wilson to start because he looks sharp off the bench. Wilson is a good player but he is nowhere near the level of Kane, it’s just because the captain is struggling."