@dan_aharoni Your target can directly forward the STATE messages coming from the tap once all of the RECORDs up to that point have been persisted, without merging, because the tap already makes sure each next STATE message contains at least the bookmarks of the previous one.
Meltano will update the pipeline's state in the system database whenever it receives a new STATE message from the target, so that the pipeline can be interrupted and restarted at any point. If the pipeline succeeds, only the final STATE message will remain in the DB.