There is no TV tuner in the Mercury II
That connection assumes you use a coax to connect the Merc to your TV, which is then tuned to Channel 3/4
But with the Merc in standby, you can then tune your TV set to all the local stations using your outdoor antenna.
Personally, I plug my FTA receiver into the TV via the RCA composite jacks, so that stuff is worthless.
The only time I've ever used the RF modulator output on a receiver, is to run a bedroom TV in a distant room.
Then, I had to solve the problem with the remote. - - (which I did)