Elder Kaioshin knew enough about Metamoran Fusion to differentiate it from Potara. He knew the weaknesses since he described the strengths of Potara. If power was the issue, he had plenty of time to mention it, but the only thing he mentioned as the downside of Metamoran Fusion at the time was having to do the dance.
Boo didn't care if Goku and Vegeta fused, though. Like you said, he was going to kill Goku regardless and was already on his way to their location. When he was Gotenks-Boo, he expressed a small amount of doubt despite being sure of his victory, but after absorbing Gohan, he didn't care at all and wasn't even going to humor the opportunity.