In other words, is the following \"cursoring\" approach guaranteed to work:
Guaranteed as in absolutely under no circumstances whatsoever could you possibly get a value that might be less than or equal to the current maximum value? No, there is no such guarantee. That said, the circumstances under which that scenario could happen are limited:
Assuming none of these circumstances, you are safe from race conditions creating a situation where the next value is lower than an existing value. That said, there is no guarantee that the rows will be committed in the order that of their identity values. For example:
Until the first transaction is committed, 43 exists but 42 does not. The identity column is simply reserving a value, it is not dictating the order of commits.