If I understand correctly:
If you have 500 ranked rounds at the Legend tier and have a scoring average of 60 you tier up to Tour Legend. (equivalent average score of 30 on 9 hole rounds)
Ranked rounds, regardless of score, count to your 500 ranked rounds saturation requirement.
Until you reach the 500 ranked rounds saturation point, your scoring average can go both up and down based on the scores you make when you play ranked rounds.
Once the 500 ranked rounds saturation point has been surpassed, your scoring average can no longer go up, and will stay the same or go down based on your scores.