What you said is essentially correct. (You forgot things that happen periodically without human intervention, like expiring paid accounts or renewing them if said to recurring billing by credit card, but that's not relevant here.)

But in this case, I don't think it's needed. Merging a tag isn't really different, here, from deleting a tag (not just removing it from an entry - completely deleting it) or an access group, neither of which (IIRC) uses TheSchwartz.