Do Sequences Have the Same Replication Range Limits As Identities?
With merge replication, identity ranges must be allocated to the publisher and each subscriber. Identity range management can be either manual or automatic. 

As you already have found out, when a range is exhausted, a new range must be allocated. With automatic range management, the merge agent takes care of allocating a new range, with manual range management you decide what should happen. 

With sequences, you will still have the same problem, with the difference that there is no such thing as automatic sequence range management, so your only option is manual range allocation. (FWIW, identities are implemented with sequences in SQL Server 2012 and above).

My suggestion is to avoid identities and sequences altogether: they do more harm than good. Did you know that in order to let identity range allocation happen at the publisher, the users that insert data in the database need to be members of the db_owner role? Yeah, that's awful.

With merge replication you need a uniqueidentifier ROWGUIDCOL anyway, so why don't you use that column as your surrogate key instead? If your key is really a surrogate, nobody should be able to see it or use it and it should be completely transparent to the application.