Supposition #1:
In creating an .esp you are fundamentally creating a list of changes to make to an .esm

Supposition #2:
An .esm file has the original "state of affairs" for a game (the original intent) while an .esp acts as a list of changes and additions to make to the .esm data during game play.

Question:
When we merge an .esp with an .esm does the .esm maintain the list of changes that were introduced in the .esp, or does the .esp get lost and the .esm take on a new "state of affairs" as if the changes were never made, i.e. as if the .esm with the changes of the .esp were the original intent? In other words is the original intent replaced by the new intent, or is the original intent still there, just with a list of new intentions?

I'm asking this to better understand .esm bloat. If I'm creating a new worldspace mod do I need to make every decision perfectly as .esp files are created so that my final .esp or .esm doesn't end up being gigantic? Or do i need to go back and remove every single time I slightly change my mind on a particular aspect? I'm asking this particularly about region generation. In other words generating a region... changing my mind about contents and removing the region... and then repopulating the region with new contets - does that cause my .esp file to grow unnecessarily? Do my old decisions get discarded when I merge an .esp file with the .esm.

I'm not the most knowledgable modder, but I'm certain your suppositions are dead on.
You have the answer to your question in your question: " ... the original intent replaced by the new intent ... "

Thanks for the quick reply. I'm working on a wiki article and region generation and wanted to make sure it's okay to recommend deleting region data on a new world space if it's not quite what you want the first time you generate it.

....especially if you've already saved and merged your region borders to an .esm and need to make changes to the borders. Large worlds are difficult to map borders out perfectly to the first time. Then there's also the fact I made some regions almost too large to generate.