1st: Cooperation is expected to be mainly on common platform /modules / parts  for small cars eg  Smart  / Twingo / Nissan (don't know the model types here). 

2nd: You may know that A- and B- Class are using exklusiv developed 4 cylinder engines and drive-train parts which can't be used in other  models like Viano, C-Class? IMHO it make sense to develop a common engine base for both companies. Intake system, haeds may differ, depending on model type.

BTW. VW does the same eg. with the 6 Cyl. D6 engine (shared by  VW, Audi A4+A6, Porsche Cayenne)

3d. Infinity will get also some of the bigger engines from MB, but not the top notch range.
I don't think that it will harm MB sales or prestige