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I even bought multiple items from him.
I've figured it out. Kinda... So, his model (body) disappears after quest completion due bug. If you click on empty space when he should be you still got end quest dialogue. You need to enable TQ beta in steam settings. Now he is present where he should be, but with two stacked models. One is merchant and one gives end quest line. With that buying 'monster green' items will unlock BAO and white item with monster name (i. e.: Moguai Gloves) will give Bao. Also both achievements unlocked with something like 30 seconds delay after leaving merchant.
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Also it seems that 'Altoholic' achievement is bugged now. I got six dual class characters with 10+ levels and it's not unlocking.
You can also sell him a rare/unique item and then buy it back. That unlocks BAO.
He is just near a house in the marshland region with the toad and the phoenix mission just before the final Scorched section and ascent to the final boss begins.
Thanks, I am halfway through Heavens! Glad to know I have not missed it!
Thank you - worked for me (after he disappeared).