T-Sql update and avoid conflict - tsql

Question

I'm trying to migrate a Tomcat app from using Postgres 9.5 to SQL Server 2016 and I've got a problem statement I can't seem to duplicate.
It's basically an upsert but one of the complications is the request supplies arguments to do the update, but when there is conflict I need to use some of the existing values from conflicting rows to insert/update.
The primary keys in the table can sometimes cause a conflict, which requires updating rows and deleting the old ones.
The table schema in MS SQL looks like:
CREATE TABLE [dbo].[signup](
[site_key] [varchar](32) NOT NULL,
[list_id] [bigint] NOT NULL,
[email_address] [varchar](256) NOT NULL,
[customer_id] [bigint] NULL,
[attribute1] [varchar](64) NULL,
[date1] [datetime] NOT NULL,
[date2] [datetime] NULL,
CONSTRAINT [pk_signup] PRIMARY KEY CLUSTERED
(
[site_key] ASC,
[list_id] ASC,
[email_address] ASC
)WITH (PAD_INDEX = OFF, STATISTICS_NORECOMPUTE = OFF, IGNORE_DUP_KEY = OFF, ALLOW_ROW_LOCKS = ON, ALLOW_PAGE_LOCKS = ON) ON [PRIMARY]
) ON [PRIMARY]
The old Postgres SQL looked like this:
WITH updated_rows AS (
INSERT INTO signup
(site_key, list_id, email_address, customer_id, attribute1, date1, date2)
SELECT site_key, list_id, :emailAddress, customer_id, attribute1, date1, date2
FROM signup WHERE customer_id = :customerId and email_address <> :emailAddress
ON CONFLICT (site_key, list_id, email_address) DO UPDATE SET customer_id = excluded.customer_id
RETURNING site_key, customer_id, email_address, list_id
)
DELETE FROM signup AS signup_delete USING updated_rows
WHERE
signup_delete.site_key = updated_rows.site_key
AND signup_delete.customer_id = updated_rows.customer_id
AND signup_delete.list_id = updated_rows.list_id
AND signup_delete.email_address <> :emailAddress;
Two arguments are supplied, customer id and email address, shown here as Spring NamedParameterJdbcTemplate values :customerId and :emailAddress
It's trying to change the email address of the customer id to be the supplied one, but sometimes the supplied email address already exists in the primary key constraint.
In which case it needs to change the existing customer id to be supplied one, and remove the rows with that don't match the new email address.
I also need to try and maintain isolation so that nothing can change the data whilst I'm updating.
I'm trying to do it with a MERGE statement but I can't seem to get it to work, it's complaining I cant use values that aren't in the clause scope, but I think I've probably got other issues here too.
This is what I had so far. It doesn't even address the deleting part - only the upserting, but I can't even get this part to work. I was planning to use the OUTPUT from this as input to something to delete the rows similar to the postgres version.
WITH source AS (
SELECT cs.[site_key] as existing_site_key,
cs.list_id as existing_list_id,
cs.email_address as existing_email,
cs.customer_id as existing_customer_id,
cs.attribute1 as existing_attribute1,
cs.date1 as existing_date1,
cs.date2 as existing_date2,
cs2.email_address as conflicting_email,
cs2.customer_id AS conflicting_customer_id
FROM [dbo].[signup] cs
LEFT JOIN [dbo].[signup] cs2 ON cs2.email_address = :emailAddress
AND cs.site_key = cs2.site_key
AND cs.list_id = cs2.list_id
WHERE cs.customer_id = :customerId
)
MERGE signup WITH (HOLDLOCK) AS target
USING source
ON ( source.conflicting_customer_id is not null )
WHEN MATCHED AND source.existing_site_key = target.site_key AND source.existing_list_id = target.list_id AND source.conflicting_email = target.email_address THEN UPDATE
SET customer_id = :customerId
WHEN NOT MATCHED BY target AND source.existing_site_key = target.site_key AND source.existing_list_id = target.list_id AND source.conflicting_customer_id = :customerId THEN INSERT
(site_key, list_id, email_address, customer_id, attribute1, date1, date2) VALUES
(source.existing_site_key, source.existing_list_id, :emailAddress, source.customer_id, source.existing_attribute1, source.existing_date1, source.existing_date2)
Thanks,
mikee