Two first-half goals from Roberto Firmino and one from Sadio Mane put the Reds on course to qualify for the knockout stages, but the hosts struck back in the second-half through a Wissam Ben Yedder brace and a 93rd minute equaliser from Guido Pizarro.
Left-back Alberto Moreno was at fault for two of Sevilla's goals and was replaced by James Milner in the 63rd minute, capping a miserable return to his former club.
Further up the pitch, Jordan Henderson struggled to exert any sort of control in midfield, with one statistic showing that he only managed a 55% pass completion rate and failed to make a single successful tackle.
Merson said a second-half collapse from the visitors was always on the cards given the defensive issues that have plagued the Reds throughout this season.
"It doesn't surprise me," he told Sky Sports. "You just know that Liverpool are so poor. It's happened too many times at set plays, especially at corners, and I question whether they are working on corners.
"Concentration levels are poor. Jordan Henderson has captained England in recent months but he gambles at the corner which leads to Sevilla's equaliser.
"Liverpool simply do not take enough responsibility at set pieces to ensure that their man doesn't score. And when it was 3-2, five players went forward in attack instead of just sitting back."
Ex-Arsenal forward Ian Wright agreed with Merson's assessment of Liverpool's defending and backed Chelsea to get all three points when they visit Anfield this weekend.
"Having watched Liverpool's game in Sevilla, you have to fancy Chelsea on Saturday. You have to worry for Liverpool because Chelsea will be ruthless against them," Wright said.
"Even if they do score a couple of goals, Chelsea will fancy getting back into the game because that is how Liverpool make you feel these days."