There's nothing inherently wrong with prioritizing Evasion as a Mercenary (though I don't think the Devs intended it). It, like Defense, gets better the higher you stack it.
Accuracy bonuses help Rapid Fire/Sturm & Drang only to a point. 'Flurry' attacks have a fixed 45% chance to miss, even if you'd otherwise hit. Only 'Bonus Hit Rate' on weapons negates it. (Or inflicting Stun/Paralyze on the target. Attacks vs a Stunned/Paralyzed target always hit.)
The extra damage for negative Evasion only applies to HP. Shield damage isn't increased. Because it's total Evasion, you can negate penalties from Armor with other equipment. If you had Riposte, you'd have 15% to work with, so long as you were making basic Melee attacks. Given the way Sturm & Drang is coded, that might count, too, but it's hard to check.
The Power Armor flag is mostly useless if you've maxed Physique, yes, but don't discount other flags. The
Paragon Hazard Armor Couch suggested also has Airtight, negating a lot of Tease attacks, as well as Irradiated (but only reduces Heavily Irradiated) on Phaedra (whenever they get around to implementing it outside the Downed Ship).
Also consider the rest of your equipment. The stat totals are as important as the individual values.
Is there a reason you're still using the Saurmorian Railgun? I'm fairly certain there are better weapons right now.
If I did my math right,
Ice Cappers work out to about the same expected damage, because they can Crit.
The
Grenade Launcher has +5 Evasion and the ability to change damage types in combat.
Hirudo Devourer/
NaN Deconstructor have lower base damage than the Railgun, but would heal you for 50% of the damage you deal.
What do you have in your Melee slot?
The
Custom Shock Gear would give you some bonus Evasion and give you Stun Chance for S&D. (Disclaimer: X Chance flags only apply once doing HP/Lust damage, so you need to deal with Shields/Armor first.)
Magma Crusher has Stun and Burn (which doesn't suck now).
Or you could create a
custom weapon with high Evasion/Defense or add Health/Shields. Note: Stats are highly randomized. Damage & other stats have an inverse correlation.
Ganger Jacket gives 2 Evasion, 75 Health and a bonus to escaping Grapples.
Hardlight Bracelets give 4 Evasion and 8 Defense.
Light Jetpack gives 10 Evasion and lets you Fly. You probably don't need to Fly to hit enemies, but it lets you auto avoid certain Trips and anything coded as a basic Melee attack (not as many as you'd think, but Vermillion's most damaging attack is completely negated).
I have an experimental loadout with Paragon Hazard, Prototype Pirate Shield, Grenade Launcher, a custom weapon with 22 Defense (& Vampiric) and Hardlight Bracelets.
Ends up with 325 Shields, 45 Defense, +10 HP and 2% Evasion (before Riposte).
My Merc is a melee-primary switch-hitter, and the idea is minimizing incoming damage and heal with Vampiric. You could put Stun on yours or push Evasion/Defense higher by forgoing an extra Flag.