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Okay using Broken World I took a new character directly to Merlin's Lake and stepped on the circle, Merlin Appeared and we chatted. The quest activated and I picked up the small crystal. Going back to my previous Broken World party I opened the lore tab and looked at the quest items and the same small crystal is there. However Merlin as I said never appeared and the quest did not activate. If I recall correctly the crystal was on the ground already and I picked it up prior to stepping in the circle. Anyway all is well, I will just take the new character to a few lands pick up a useful crew and run the map again from the start.