Yes, I think your suggestion would work, but the problem is not that I used the wrong "custom text" on work units; I added the correct "custom text" and have used that on the work units instead. The problem is that the incorrect "custom text" can't be removed (or be corrected) from the Custom Tag itself.
I'll try to clarify the scenario a bit more. Let's assume I've been using the Client custom tag for several months. In that time I have added 20 clients as "custom text". Now, after several months, I make a typo on a new client name "custom text". Immediately after saving the new "custom text", I catch my error and make a corrected "custom text", however the incorrect "custom text" will forever be on my list of clients for that Custom Tag. If my understanding is correct, the only way to get rid of that incorrect "custom text" is to delete the Custom Tag and create a replacement, and then reassign the new Custom Tag to all the existing work units. One "custom text" typo is an annoyance, but more mistakes will likely happen, and there may be other reasons to need to make corrections to the "custom text" - staff changes, name changes, etc.
Perhaps my use of Custom Tags in this way is unique, and, if so, may not warrant as a feature improvement. But the Custom Tags are extremely useful for tag management and I'd love to see their capabilities improve.