Can't mean loquacity in itself, because mermaids don't talk. I take it as meaning that she is off in a world of her own, out of touch with reality.

In fact a search engine throws up a passage earlier in the bookm, as well as another later on, which explains what Dickens is doing here:

"With these words, and with a hasty gesture fraught with timid
caution--such a gesture had Clennam's eyes been familiar with in
the old time--poor Flora left herself at eighteen years of age, a
long long way behind again; and came to a full stop at last.

Or rather, she left about half of herself at eighteen years of age
behind, and grafted the rest on to the relict of the late Mr F.;
thus making a moral mermaid of herself, which her once boy-lover
contemplated with feelings wherein his sense of the sorrowful and
his sense of the comical were curiously blended."

Taht's the first use of the term in relation to Flora - the idea is that a mermaid is half a fish and half a human, and Flora is half an adult and half still an adolescent. Not quite in touch with the world as it is.