Firstly, you shouldn't mix content controls and formfields in the same document. They were not designed to work together and can exhibit some strange behaviour at times if you do so. The problem you're having may be part of that. Amongst other things, you can't tab out of a Content Control into a formfield. In any event, you can't tab out of a Rich Text Content Control (because they accept tabs as input); you need to use the mouse to select another control. Aside from such peculiarities, you should be able to edit a Rich Text Content Control in a document with filling-in-forms editing restrictions.

A document with filling-in-forms editing restrictions cannot be used for a mailmerge - you would have to apply those restrictions post-merge. In any event, Content Controls don't require any form of editing restrictions - the most you might need to do is to set their 'cannot be deleted' property. If you need to have some kind of shading, you could apply the 'no changes (read only)' restrictions - to each content control - post merge (you'd probably want to use a macro for that).

If the Rich Text Content Control isn't populated by the mergefield, it will display its pale-grey default 'click here to enter text' prompt.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]