Don't use Merciless. Just don't. It's real damn bad. If you use Merciless Toxapex, it is a complete waste of this Defensive powerhouse of a Pokemon. A lot of people think the crits will compensate for the low base Attack/Special Attack, but the opponent needs to be poisoned, and if your opponent is poisoned, why wouldn't you just take advantage of Toxapex's high defenses to semi-stall them instead? It will save HP, and probably take the same amount of turns considering its base 53 and 63 Attack Stats. On top of that, it's also slow. If you want to use an offensive Poison Type/Water Type, use Nihilego or Gyarados or Greninja or something. Not this.
Toxapex @ Black Sludge / Rocky Helmet - Rocky Helmet and Black Sludge are both amazing on this Mon, this decision really just comes down to personal preference.
Ability: Regenerator - The ability to recover HP just by switching is an amazing tool to have, and it opens up a lot of extra opportunities for Toxapex and the rest of your team.
EVs: 252 HP / 252 Def / 4 SpD - Maximize the Defensive potential of Toxapex, helping it beat a lot of powerful physical Attackers.
IVs: 0 Atk - Take a little less damage from Foul Play and confusion
- Toxic Spikes - Toxapex is a great user of Toxic Spikes, since it can usually sponge up a few hits in order to set up at least one layer.
- Scald - In my opinion, Scald is probably the second best move in the game. Being able to damage the opponent while having a 30% chance to burn them, which in turn chips at their HP and halves their Attack stat, is just perfect for a Mon like Toxapex.
- Haze - Haze isn't really a necessity on a good Toxapex moveset, but it really does help in order to not be complete and utter setup bait. Resetting all stat boosts with the click of a button is another really good tool for Toxapex to be as beneficial to a team as it can.
- Recover - Recovering 50% of your HP by just clicking the gray colour is almost completely necessary for any Toxapex set.
Also, Baneful Bunker is pretty bad, at least on Toxapex. It's very predictable, and it doesn't toxic poison opponents like Toxic Spikes can. It can be used, but if it's on your moveset, you need to make sure not to just spam it mindlessly.
Oh, and Stockpile is bad too. No point in raising your already sky-high defenses even further, it won't really help you in the long run. It's not like you can sweep a team by having high defenses. It really isn't worth the loss of a precious move slot.