Susan comes into Merton's room and says that Milly has "turned her face to the wall." We don't really know what that means, but it sounds bad. For the next few minutes, the two of them talk at one another without really communicating.
Merton asks if Milly is dying, while Susan asks him if he'll stay because he loves Milly. Neither gives straight answers to the other's questions. Jamesian prose, duders.
Susan is surprised that Merton knows that Milly is terminally ill. He's not supposed to know, because his interest in Milly is supposed to look as pure as snow, according to Kate's master plan.
Susan says she's doing Milly harm by talking to Merton. Merton then asks whether Milly truly hates him and if she's willing to see him again.
Susan tells Merton that he must know why Milly has taken such a bad turn and why she's upset with him. She gets up to go. But before she's gone, she asks Merton if he'll do Milly one last favor, which is to "deny it."
Deny what, Merton wants to know. He has no clue what he's supposed to deny in front of Milly. Apparently, he's supposed to deny what Lord Mark has told Milly on his recent visit: that Merton and Kate are engaged to be married. Lord Mark, you're one serious d-bag.
#1, Merton wants to know how Lord Mark could possibly know this. #2, he knows that Lord Mark has only done this to spite him because he's jealous of the fact that both Milly and Kate like Merton better.
Merton then wants to know whether Lord Mark has been visiting Maud and Kate back in London. It turns out that Lord Mark has been visiting Kate more often because he has felt like his chances have improved lately, especially with Merton gone.
Merton can't believe that Lord Mark would destroy Milly's heart like that, especially knowing that she only has a few months to live. It's just pure revenge, plain and simple, with no regard for hurting a dying chick.
Merton also finds out that Lord Mark has been playing the same game as him all along. The man has been trying to marry Milly because she's terminally ill and he wants her money.
Brb, we're going to go throw raw eggs at Lord Mark's fugly face. Who's with us?
Susan returns to her initial request: will Merton deny his relationship with Kate in front of Milly if Sir Luke says it's the right thing to do? She even thinks that Merton can save Milly's life if he denies the relationship.
But Merton doesn't sound like he's capable of telling a (really, really white) lie, even if it's to comfort a dying woman.