Wool surface is quite scaly, like roof tiles. The truth is that, it is harder for bacteria to survive on scaly surfaces compared to smooth synthetic fibers. And the absence of bacteria means less odor. However, merino fabric also absorbs water vapor before it becomes condensed as sweat on the surface of the skin. This automatically reduces the amount of sweat produced, which could be a breeding ground for unpleasant smell.
Wool fiber also has a natural, self-cleaning effect. It contains keratin (protein fiber) which causes a breakdown of the odor-inducing bacteria on your skin. There are 2 cell types at the core of every wool fiber. These 2 cell types can absorb a lot of moisture which can lead to different degrees of swelling. The resulting friction from this process can produce a mechanical self-cleaning outcome. This is why, users are advised to desist from washing wool clothing excessively so it can be worn for a while.