In theory the
\*MERGEFORMAT switch is supposed to retain the format of the item being referenced and Microsoft in their wisdom insert it by default when you insert a field, though you can choose not to by unchecking the option 'Preserve formatting during updates'.
In practice it is probably best avoided. You can remove the switch from your document by displaying the field structure (ALT+F9) and use the Replace function, or see
Change Word Field Formatting Switch