The answer appears to be:
Subchapter M “inspections” are not hull, machinery, watertight integrity, stability, fire protection, or safety inspections of the tugboat itself (as inspections of small passenger vessels are under Subchapter T, or as OSVs are inspected under Subchapter I).
Subchapter M is just an audit of the modern SMS paperwork being done on old, obsolete, and often unsafe, tugboats.
To the question: When is Subchapter M going to encourage the retirement of 40, 50, 60, 70 year old tugboats? The answer appears to be: Never.