Where is the incentive to update the Merkle root
The merkle root ensures that transactions were part of the block that is being found. It links the block header to the set of transactions in the block.

So if you don't update the merkle root you are not actually confirming the transactions, and you won't be able to collect the fee of the transactions. So the incentive to update the merkle root is the same as for including transactions into a block: you get transaction fees for doing so.