You want them separated by item for label printer but you want quantities to be merged. You would have to create individual print jobs for each item that you want labels printed. Set the print jobs for the items that you want merged to print ALL lines set the print job for the items you do not want merged as separated.
Take advantage of the Product mapping for each print job.
PS. I was not implying you have to use v4. We understand some people are waiting for language support in v5 when its released but we still need to keep discussions in the v4 forum about v4. V3 has its own support system and yes its not used much but that is simply because the community for v3 has dropped considerably due to v4 being the current version and v5 due out soon.