That is a straight-forward and accurate analysis. 

Whatever MERS shows in it's internal corporate database has no bearing on the public record which constitutes the constructive public notice of all title matters.

Who cares if their own database shows one thing or another?  Unless that database shows a material indexing flaw in the public record, it is irrelevant;  they notified their own staff, employees and  managers of certain matters by posting it there, but never bothered to put it to the actual land title records?  lol