The "retag questions" privilege allows the users who don't have the privilege of editing every post to edit the tags. When the privilege was introduced, the suggested edits were not yet implemented. This means that the only users who were able to edit a post were the ones having the "edit questions and answers" privilege, except when the post was CW which would be editable from everybody who had the "edit community wiki" privilege.
Now that suggested edits are implemented, the "retag questions" privilege allows users to change the tags used from a question without to put the edit in the suggested edits queue.
The privilege page for "retag questions" is fine as it is. It cannot say anything said from the "edit questions and answers" privilege page, as the users with just the "retag questions" privilege don't still have the privilege of editing every post; the part about when a post should be edited doesn't make sense for retagging a question.
If you are saying the "retag questions" should make clear that the retags done with the "retag" link are not going through the peer review system, then I agree with that.