Abruptly, in front of a display of Japanese weapons, an official person in ragged plainclothes, unshaven, mistrusting and bitterly humorless, who may or may not have been a museum guard, grabbed hold of him on suspicion of having stolen some small art object, and demanded that he empty out his pockets, including a bulging and dilapidated cowhide wallet, which the "guard" indicated was to be emptied, too.
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"in front of a display of Japanese weapons"
One major thing that distinguishes Japanese weapons from all other weapons is their relationship to suicide. And that form of suicide is by disembowlment, or, to fit with the passage, the emptying of one's internal organs for all to see.
"an official person in ragged plainclothes, unshaven, mistrusting and bitterly humorless"
It's possible this reflects back on the "people he didn't know but was supposed to know" bit in that Merle recognizes this person as an official working for the museum even though nothing except the "bitterly humorless" bit suggests their profession. It does feel a bit like a noir detective patting Merle down more than an official museum guard.
"who may or may not have been a museum guard"
Merle's uncertainty may be whether or not this person works for the museum, as a guard or something else, even though Merle senses that he's some kind of official authority. Using "guard" in quotation marks later suggests Merle doesn't entirely trust that this person has a right to accuse him and search him. But Merle feels obligated to empty his pockets anyway.
"suspicion of having stolen some small art object"
This stolen item may be at the heart of the dream. What has Merle taken from the world? What is he selfishly trying to keep for himself? Could it be part of the reason Erlys left him? Or is it just the dreams means to get Merle to expose himself to others (or, since the others may be aspects of himself, to himself).
"a bulging and dilapidated cowhide wallet"
With most people keeping all of their lives and information on phones, do the latest generations understand how common the image of a man's bulging wallet was? I suppose if they still watch Seinfeld, they've seen the episode with George's exploding wallet and so have some inkling of this fairly common object. It's hard to tell anymore what any young person knows or can relate to since they have access to everything. It all depends on what's been memed recently or what they've chosen to view through streaming services and YouTube, I suppose.
"indicated was to be emptied"
Obviously Merle couldn't hide a small object of art inside his cowhide wallet. The emptying of the wallet shows that it's the exposing of Merle's most inner secrets that is important here. People's wallets are full of memories, full of past lives, full of dead ends and failed timelines. I would guess a person's wallet was probably often full of a person's regrets: phone numbers, photographs, business cards, Christmas gift tags, concert tickets. Just a mishmash of things whose presence only the wallet's owner can easily explain.
