Ok, I am just a sucker for punishment, after trying your plugin once on my husband's kindle I just had to try it on mine, which has more books and more collections. WOW, not only did it add all 1271 books to the correct collection, but I did not have the problem with those 227 books not going into their correct collection. We may have a winner now. I will test it some more throughout the week with the change in collections, but so far so good.
Now I have a rhetorical question for you: If a books has multiple tags, will it add the book to multiple collections??