The sheer fact of this meeting is proof that God is merciful. There is a connection between his absolute existence and his sovereign freedom and his omnipotence and overflowing mercy. The most fruitful way I have found for answering this is to see how the other Old Testament writers used this passage. Take Joel and Jonah, for example. So the assumption is that the people whom the Lord will not forgive are the unrepentant people who will not return to God with all their heart.
Forgiveness is for the repentant.
The refusal of forgiveness is for the unrepentant. Jonah sees things the same way. After he preaches to the Ninevites they repent, God spares them, and Jonah is angry with God for being so merciful. But it displeased Jonah exceedingly, and he was angry. This is God's nature.