The one thing that makes this particular theory interesting and what I feel is very close to how time and dimensional travel work in the Chronoverse is the part of the Entity playing the guiding force behind it.
Given many factors, such as 'discarded' timelines ending up in the DBT, the need for TTI and TB just to name a few, an outside force such as the Entity would almost be required to keep track of it all and to oversee that the many changes that occur fit together without unraveling everything into one big paradoxal mess.
For example, in quantum physics, the Many-World's Theory states that for every possible outcome, multiple universes are created to accomodate each outcome. With this, each change to the timeline that Crono and co. create would thus render any previous timelines as simply another dimension. As such, they weren't so much traveling through time but hopping from one dimension to another as their actions forced one outcome of events over another. However, what creates a problem in the Chronoverse according to this theory is that upon returning to the times from which they are originally from, they do not run into what would be their alternate selves (which would occur in dimensional travel). There is also the matter of changed timelines ending up in the DBT rather than being an alternate dimension.
This lends credit to a force such as the Entity shaping not so much the timeline as the world itself in order to accomodate any changes made to the timeline by Crono and co. Those pieces of events where are no longer a part of the timeline end up in the DBT, which is seen as sort of the dumping ground of changed timelines.
To hop off the subject for a moment, I've never seen the DBT as a place where discarded timelines are placed. To me, it seemed like a place where all things - the dreams of the world - are kept, being removed and placed back as necessary. Anyhow...
Theories such as TTI and TB in this case are more akin to tools used by the Entity to ensure that time travelers remain unchanged themselves in order to allow them to continue with their efforts. I think, though, that in order keep some sort of balance, these particular tools have to apply to all time travelers, as I'm sure the Entity wouldn't use them on those that wish to bring about an end to the world.
As for the dimensional travel in CC, given that I believe its been stated that such is a rare occurance, events leading up to the 50/50 chance of Serge living and dying made for an ideal spot for the Entity to split the world into two to allow for the various events in the game to unfold as they did.
The thing with the Chronoverse that I've come to the conclusion of is that no real world theories can be applied without adding in a force such as the Entity to help keep it all together. While I don't really agree that the timeline itself or the Entity is learning from its mistakes, I do feel that its shaping of time and space much like modeling clay is a very good example and one of the better theories of time travel in the Chronoverse.