Yes, Harry. You can edit the collections directly on the Kindle through the plugin. And you can also tell the Collections plugin to completely ignore certain collections. However, let me be clear - I haven't ever tested with collections and books I don't have in Calibre. For the simple reason that I don't have any books that aren't in Calibre for any longer than the time it takes to add them from the Kindle to Calibre.
If you have a concern, I'd ask meme first. S/he has been pretty responsive. (And if doesn't do what you want now, it may well trigger a feature update, always a good thing.)
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