At least in projects created from MS Word documents it can. Not sure about other file formats.
Okay, I managed to merge some paragraph spanning segments in Studio 2017 and injected them with the dreadful Lorem Ipsum virus in CafeTran:
Export of the CafeTran modified SDLXLIFF in Studio twenty-seventeen (as they call it) succeed.
Uff...
HL
Studio 2017 allows merging of segments across paragraph boundaries.
Did anyone test such a project with paragraph spanning segments in CafeTran?