That's an interesting implication.
You'd think so - as otherwise, all the permutations are just too great - especially when you start considering all sorts of daily weirdness - such at the 510 Spadina cars rolling past St. Andrew and King stations every day heading to/from the yard, or frequent 506 detours past Dundas or Queen, or routes meeting during a detour that never meet otherwise. Or changing from one 501 to another 501 to yet another 501 every time you get short-turned on a long trip.
If they do end up doing a timed-transfer straight away (without board approval) there are immediate revenue implications - it's not unusual for example for my wife to take the kids to school 4 stops, and 15 minutes after her first tap to be heading the other direction to drop the other at pre-school - and then 15 minutes again be heading back in the first direction again. One fare instead of three? Bonus! And when I drop the one off, I get off drop off the child, and then reboard at the same stop only 5 minutes later, and keep going the same direction. How can it possibly differentiate between that and a short-turn or out-of-service?
It's going to be interesting ...
I agree, it REALLY seems as though they have no choice here but use a time based transfer. Maybe, at the very most, add the logic of "tap on a streetcar on route X, next tap cannot be on same route in either direction" but then short turns would be screwed...that said, maybe make it so you don't have to tap after a short turn, as POP inspectors can easily see where and when you tapped your card and hopefully do the mental math
As stated earlier, and I've just tweeted Brad about this exact case and hope to hear back soon, take this example: I tap on an eastbound 509 streetcar headed to Union, I transfer to northbound Line 1 to King Station (a free transfer with no fare gates/barriers/presto readers, so my POP is
not updated for this connection), then get out and transfer to an eastbound 504, where I do have to tap. How will the 504 possibly know my transfer is valid? If my last tap was for an eastbound 509, those routes are parallel and completely non-intersecting in regular operation, so the 504 presto devices would be justified in refusing the transfer and charging a second $2.80 fare instead. However, that is obviously not the case as 509>subway>504 is a valid connection--but there is no way for it to know that with the 509/510 being in the fare paid area at Union.
Since according to the TTC's current instructions, as best we know this is supposed to work/be possible, and the only way I can imagine that working properly is for a sort of time-based transfer with, at most, some very minimal logic to disqualify abuse, i.e. a time-based transfer with a blacklist as opposed to a whitelist of allowed transfers.