Pretty close, but let me clarify a bit as it is a little more involved and pretty important to understand, so that you know what you are doing, and it helps to debug further or whenever you come across it again!

The streaming checkpoint doesn't replay every schema change step by step. What actually happens is that the checkpoint stores the schema and the last processed version offset. When the stream advances, it reads the Delta log entries sequentially from that offset forward. If it encounters any transaction in that log that represents a non-additive change (drop, rename, type change), it stops right there with the error. It doesn't look at the transactions before or after it just refuses to move past that one incompatible entry.