Merge Statment

Hi

I have merge statement like below, for eq. I have 1000 rows in t1 target , 900 rows in t2 the source and all of them in t1 target, I found DateModified has a new date for 900, so far is perfect.
But OUTPUT $action gives me 1000 for Update, why?, it should be 900 .
My script like this

Merge t1 t
Using (
select
* from t2
) As s
ON   s.ID=t.ID  
WHEN MATCHED THEN UPDATE
SET

 t.col1=s.col1,
 t.col2=s.col2,
t.DateModified=GetDate()


WHEN NOT MATCHED BY TARGET THEN  
Insert
(
t.col1,
 t.col2,
t.DateModified
)
Values (
s.col1,
 s.col2,
GetDate()
         )
WHEN NOT MATCHED BY Source THEN UPDATE
SET t.IsActive=0
 OUTPUT $action into @Actions;