But a shallower pool still wouldn't allow one to
drown the victims... They'd just bob up and down on it, unless somehow held under. And if they didn't suffer from some other form of toxic shock their biggest health impact would be madness and senility in longer time-scales that might be entertaining, but not practical for a trap.
On the other hand, it might make easier-retrievable Goblinite, since the dord[1] of mercury (IRL) is about 13-and-a-half g/cm³ (or, alternately, kg/m³, the more SI-styled unit which just happens to be
exactly the same in magnitude) , more than any normally available DF metal or alloy that I have thought to look up the figures for, except for gold or platinum. Even
lead items will float in mercury (11.3-ish units on that density scale). Iron variants, including steel, are almost all a tad below 8 g/cm³.
So, similar to your water-setup, set up a pit to drop the enemy into. Whether it has mercury in it already, or not, it needs 1Z of air, to prevent them simply "rolling out". Then shoot at them. When dead, fill to the brim with pumped-/bucketted-in mercury, scoop everything off of the surface (including all ammo used, which should not have broken). It would be nice to have boiled and burnt the biological bits away (this
would including relevant types of ammo), if you could apply sufficient temperatures that still didn't get above the approximately 350 degrees C or so at which the mercury itself vaporises (though mercury vapours might, if controlled well, be used against a long-term siege or other trapped enemies as a "Miasma++" attack... still, it would be too long a death to be a standard attack method, of course). Would also ideally need (fictionally famous dwarven proof against such chemical and biological problems, aside) everything "shaking off" of mercury, back into this temporary lake of quicksilver, before it is pumped/bucketted empty (or emptier) again, ready to receive new enemies.
Not entirely practical. So perhaps it
is dwarfy[2]. As for age of discovery, opinions are divided, but it has been found in Egyptian tombs, IIRC (so a couple of millennia BC, at least). Practically, amalgams were made by Romans, IIRC, well before DF's general period of historical equivalence (purely legendary aspects, aside), even though instrumentation using pure mercury were probably after. (Including the first practical seismometer, IIRC, or at least the one which was used to check the speed of explosively-created seismic waves in early experiments in the field.) Other than that, there were decorative uses for mercury (e.g. to represent shining, flowing waters in Chinese tombs) as well as the alchemical aspects. Generally the latter led to "potions of eternal life" which promised so much but probably visited an earlier (or messier) death upon their imbibers. But it wasn't always just the mercuric component that was fatal, in those cases.
I've no idea how long a history mercury has in felt-work and the related hat making, but I've a general feeling it is an aspect of that and the millinery subset that lies well between the middle-ages (where such workaday uses of mercury were few) and today (where such uses are either banned or highly controlled).
[1] A word once in a dictionary, meaning "Density". Apparently, a lexicographer submitted the definition "D: Density". Another lexicographer changed this to "D or d: Density". A third lexicographer read the slip of paper as "D o r d: Density", and given they usually space out the definition word, in went the word "Dord". There. Bet you really wanted to know that.
[2] The problem being that (at the moment) there's no way to have liquids other than water or magma, or gasses other mist, miasma or smoke... I think that's all, but perhaps when you can fill pits with those barrels-worth of animal blood that you can occasionally get, the mechanism will be there to get quantities of naturally-present or modded-in mercury into a pool, or boiled into vapour, or something...