Unique mercantile luxes don't stay upon capture iirc.
Well not forever...
City-states can't be razed. When a CS conquers an ordinary AI city, it does usually raze it.
I also think CSs raze any city. It's been too long since last time I saw a CS conquering another city. It was vanilla Civ5. Don't know if this has changed in g+k and bnw.
Liberating a conquered Merch city state does NOT restore the unique luxury.
I have had a 3 city state empire, which was my allie. Fell back to 2 city states when poland attacked...
scrren shot of kathmandu puppetted Tlatelolco, and kept the city..
.Spoiler :
so city states do keep cities from a civ that beats up on that city state...
I can't find my screen of shot my 3 city state empire.
I did not realize that! I will have to keep an eye out the effect as it's not what I would have expected. Do they get their Mercantile icon back?