And if you had known what this means, ‘I desire mercy, and not sacrifice,’ you would not have condemned the guiltless. (Matthew 12.7 ESV)

"Sacrifice" in this verse refers to something that is external, i.e. sacrificial animal offering. The guilt of God's people is transferred to the animal for it to be burned up. The guilt was removed due to the process, but there is no telling that the people actually changed inside.

The beneficiary of the sacrificial offering was the person or the family who gave the offering.

"Mercy" in this verse is also translated as "compassion" or "kindness" in other Bible translations. If not fake, authentic mercy / compassion / kindness is something that is internal within us. It implies something from the heart.

We offer mercy / compassion / kindness to someone else, i.e. we are not the beneficiary.

God's desire is for me to be merciful / compassionate / kind to others. Today and every day.