This is a bitmask to determine which slots are occupied. Slots are set sequentially. They can be cleared in any order. eg, for a much smaller rUse of 4 bits, it can go 0000, 0001 0011 0111 1111 at which point the lsb would need to be cleared. as mentioned, the lsb doesn't need to be the first bit to be cleared (just looking at this module). the next state could be 0001 (just looking at this module). At that point, the lsb would still need to be cleared before other bits are set.
ext_tag_valid is used to indicate that the bit in the bitmask is 0 and thus that slot in ram is unoccupied.
you would have to look at the documentation or other modules to determine if the protocol is always safe.