I am not sure if i got your question correctly but: Yes an 0 indicated no item with that tag in the inventory. Instead of working with Tag "Cheese" you could check for itemtemplate in inventory - Only then your sentance "...is no item in the inventory" is correct because right now you check for tag not item
Also make sure at the time when the flag is set you are not already in a conversation since i am not sure what happens if you trigger convo within convo - but honestly if its only about enabling a dialog option you can just set a flag with osiris and enable a check at a question dialog.
Hope that makes sence
