Shouldn't matter either way transfer tag remains on the checked bag or not. Last month I flew CAI to GVA on MS then GVA to ZRH on LX (on single *A itinerary). At CAI a green transfer tag was applied to the bag. When I was reunited with my bag in ZRH it still had the green transfer tag on it. As other posters have noted all the information is encoded on the bag tag both physically (i.e. IATA codes) and digitally (via bar code) on the large bag tag along with several bar codes that are slapped onto your luggage. Another data point: when I flew "domestically" from YYZ to HNL on UA in December (connecting in ORD on outbound and connection in DEN on inbound leg) and checked my bag, no transfer tag was applied to the bag but my bag arrived as one of the first out of the conveyor in HNL and YYZ.

One thing I always do after picking up my checked bag is to carefully inspect the bag remove all the labels I can find. Some airlines slap a ton of tracking barcodes and stickers on your bag 'just in case'. If you miss one of these labels and then check your bag on a future flight it could confuse the baggage handling system resulting in delayed (or worse lost) luggage. Also when checking in a backpack, make sure all straps are not exposed as that can do damage to your bag/baggage handling equipment.

Safe Travels,

James