as the warning is mentioning, characteristic values do only support Ignore and Replace merge modes which is also mentioned in the according characteristic values documentation (see Knowledge Base -> Characteristics - Dynamic data model -> Characteristic values -> Merge of characteristic values).
About the merge via Service API, it is possible to define a defaultAction (see also Service API documentation). But this will change the whole merge behavior. However if you open the merge perspective of your supplier catalog in the desktop client and define an appropriate merge mode for characteristic values (Ignore or Replace) in the merge settings, the warning will disappear in the Service API call.
Hope this helps,
Unfortunately I have over 4400 catalogs, so opening them all manually isn't really an option.
But what you're saying is that I should specify a defaultAction in my call. This is to set the merge mode?
What merge settings do you want for the characteristics?