1. MUTATION: docstring claims "Does not mutate inputs" but the function mutates `default_prefs`. The line `result = default_prefs` creates a reference to the same dict object, not a copy. Subsequent mutations via `result[key] = value` directly modify the caller's dict. Demonstration: `d = {"a": 1}; merge_user_prefs(d, {"a": 2}); d == {"a": 2}` — the input dict was mutated contrary to the contract.