But will the other person really have two distinct chats with me in their list then? One with my username and one with my phone# ?
This sounds unfortunate, but I guess there's no way around this as long as Signal insist on keeping phone numbers as primary identifier.
By "link" I mean they immediately know what person the username belongs to iff they already had that person's phone number because the chat that is initialized after they scan the QR code is just the old chat being continued.
Exactly. I think that's important to know before people start giving out their Signal handles left and right because they think they're anonymous now.
If you set your privacy to nobody and someone saves your phone number, to them it will appear that you do not have a signal account, even if they start chatting with you via your handle.