Demolitionist

Three things have to be true at once. A house has to be standing empty, the Merchant has to already live in your town, and you have to be physically carrying something explosive. Carrying is literal: a bomb sitting in a chest or a Piggy Bank does not register, it has to be in your inventory. The item that catches people out is Explosives, the wired demolition charge, which does not count despite the name and the recipe. A Grenade or a plain Bomb pulled out of an underground chest does. All of that is a one time gate, and if he dies later he comes back on his own with no conditions attached. In a For the Worthy world he takes the Guide slot and is your first neighbor instead.

Most of what he sells gets bought to move terrain, not to kill things. Blasting a hellevator or hollowing an arena out of solid rock is far quicker than swinging a pickaxe at it, and the cost stops registering after your first few gold. Dynamite is the one to buy in bulk for that work. Bombs are the precision version for when you do not want to take the ceiling with you.

Grenades are worth a stack early for fighting rather than digging, since they hit hard for that stage of the game. Freeze Bombs are night only stock and only after your first boss is down. Hellfire Arrows appear the moment you cross into Hardmode and will carry a bow through the awkward stretch before the new ores are smelted. The Portable Kiln is the quiet purchase: it saves you the walk home every time a build needs a furnace. Land Mines sit behind both Plantera and a cleared Pirate Invasion, so treat them as a late toy rather than something to plan a run around. The four liquid bombs are the odd case, since he only stocks each one while you are already holding it, which means crafting the first yourself before he will sell you any more.

He throws grenades at anything hostile that comes near, and his damage climbs as you progress. Early on that is a real contribution rather than a token one, so a Blood Moon goes noticeably better with his house near where the fighting happens instead of tucked away at the quiet end of town.

Like every vendor he will sell you a pylon once he is somewhere he is content and has a neighbor within reach, so who you put him next to is worth more thought than the price tag suggests. Dropping him in Shimmer only changes how he looks, nothing else.

He is a stack of dwarf references: shorter than every other NPC, bearded, mining helmet and lantern, happiest underground, and openly hostile to the Goblin Tinkerer. His name pool is pulled from dwarves across fiction, Gimli and a lightly misspelled Durin out of Tolkien, Urist and Fikod from Dwarf Fortress, Tordak from tabletop, Beldin from the Belgariad. The running argument with the Arms Dealer about guns versus explosives carries all the way into the credits.