I have a WPF ResourceDictionary with the following TextBlock:
Per MSDN:
Resources in a merged dictionary occupy a location in the resource lookup scope that is just after the scope of the main resource dictionary they are merged into.
Resources defined in App.xaml cannot be seen by a merged ResourceDictionary. I would think it makes more sense to define a converter used in a ResourceDictionary in the ResourceDictionary itself, or another ResourceDictionary which houses all your converters.