It's not quite that simple. With the FAA it never is...
Fail to meet the recency requirements or file the paperwork and you go back to a checkride being required. At least there is a 3-month grace period for renewal though
From the comments on the article:
'This proposal has a fatal flaw in it: quoting from the NPRM:
“While the flight instructor would not be applying to renew a certificate, the FAA finds it is necessary to maintain Forms 8710–1 and 8710–11 as the collection mechanism because it would allow the FAA to continue to track the number of flight instructors who are eligible to exercise the privileges of their flight instructor certificates in a manner that flight instructors are accustomed. Additionally, utilizing Forms 8710–1 and 8710–11 would allow the FAA to validate that the flight instructor does, in fact, satisfy the recent experience requirements. Should the FAA find that the flight instructor either does not sufficiently show a recent experience requirement has been met, or does not meet the recent experience requirements, the FAA would deny the applicant’s 8710–1, and direct the appropriate Flight Standards District Office (FSDO) to issue a Letter of Disapproval to the flight instructor.”
In other words: the FAA effectively cancels your certificate if you don’t submit the “renewal” paperwork. So the only real change is: the certificate no longer tells you by when you need to renew. How is that an improvement?'