The reason for the error is that you are trying to paste in cells which contains merged cells which is not supported by the RadSpreadProcessing. You can handle this by preserving the merged cells part of the target cell range before paste, unmerge them, and after paste, you could merge them again. There might be conflicts if you are trying to paste another merged cells, but it will be up to you to resolve the conflicts.
This article explains in details how to merged and unmerge cells
I hope this works for you.
Get quickly onboarded and successful
with your Telerik and/or Kendo UI products with the Virtual Classroom free technical training, available to all active customers. Learn More.