Earlier quoted context omitted.
No, there's a difference between substantive review of applications with availability and queue management (and responding to inquiries) about applications pending availability.
Really? It sounds like the agency has to check that the applicant meets the criteria for the license in either case. Where is the cost saving?
They aren't two alternatives, they are two different functions. Verifying that the applicant meets the criteria once there is a license available (given the quantitative limits) is one function. The other function is managing distribution of the limited number of licenses. The amount of work required by the public agency for the latter function (#1 in my original list) is greater when if the only way for that to happen is people to surrender unused licenses and then new applicants to apply to the issuing agency and be waitlisted until a slot is available than if a license that the current holder can be transferred directly to a new applicant.