If you make updates to your books in Calibre such as adding or modifying tags for the book, you will need to run the plugin again to update the collections on the Kindle (and restart your Kindle). You don't need to send the book to the device again if you've just updated tags, although the book must be on the Kindle for the plugin to see it.
If the Kindle worked like other ereaders and read its collection data from the metadata in the book, then you wouldn't need to do this (and you wouldn't need the plugin). But the Kindle has a separate file that stores which books are in which collections, and running Create Collections updates that file with the latest information from calibre.
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