Answer Question with Knowledge action displays merge field instead of actual article in Enhanced Bots

This issue occurs because intent detection takes priority in the dialog. When the Answer Questions with Knowledge dialog contains utterances, the bot matches intent instead of invoking Knowledge search.

The merge field : {!$System.KnowledgeActionResult.Answer} will be printed as is from the Knowledge Action Dialogue a.k.a Answer Question with Knowledge dialog, instead of conversational answers from your knowledge base,  if the dialog "Answer Questions with Knowledge" has intents and your customer input matches any of the intents present on this dialog.

Important : Do not add any utterances/intent sets to the Answer Questions with Knowledge dialog, as this will end up in intent detection by the bot on this dialog,  instead of searching for relevant information in your knowledge base and generating conversational answers.

The merge field {!$System.KnowledgeActionResult.Answer} is a system variable used by Salesforce Bot Framework to insert Knowledge Base answers — it should never appear as literal text to the end user.