Mercon V is indeed the direct replacement for Mercon in automatic, manuals,, and power steering... everything EXCEPT transfer cases. Ford sells a specific transfer case fluid now which is just rebadged Mercon. Mercon V is a better fluid all around but doesn't work right with older shift on the fly transfer cases for some reason. Pretty sure it even says that on the back of the Ford Mercon V bottle.
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Indeed it is because it's additives are too slippery for the electromagnetic spin-up clutch to spin the front driveshaft up to speed properly. If it takes too long to spin up before the shift happens, the difference in speed between the t-case itself and the front driveshaft causes the shift gear to clash and that can potentially lead to the subsequent case explosion.
For this same reason I never recommend it's use in manual transmissions either unless specifically called for; it's slipperiness is often too much for the synchros to function and can cause hard shifting in the M5OD as well (already been there, done that)
For sure, use only "Dex/Merc" fluid in the M5OD, as it matches the original Mercon spec the (pre-2008) M5OD trans and t-case call for. Dex/Merc fluid is usually much cheaper than the so-called Transfer Case Fluid too.
Merc V should be OK in a NON-shift-on-the-fly t-case (or if you have a 2000 or newer truck
WITHOUT locking hubs of any type on the front axle), as neither will have the spin-up clutch in question... But my personal opinion: Merc V has no business whatsoever in any part of a Ranger unless it specifically calls for it (such as if it has a (x)R44E or (x)R55E automatic or is 2008 or newer).