Not sure about party chat, but as far as I was aware Mercenary TDM just means no parties. Seems that because your friend joined your session rather than you both going in from the start it allowed it. From the call of duty wikia it says this about MTDM – “you can’t enter it in a party and that teams are randomized, eliminating the function of the clan tag.”

I played five games just now and didn’t get in to Favela or Rundown which is a shame as I like those maps now. I didn’t manage to knife anyone tonight – got knifed plenty of times though – stupid knifers! 😮 Nevermind. There’s always next time.