I don't actually see how swapping the guts from a damaged watch to a better case is in anyway coming close to crossing any sort of line. I would consider this to be an improvement on a flawed and cheap design.
I think the big obstacle (besides the diameter of the dial vs case) will be if the Swatch stem lines up with the case tube of the Corgeut case. Is it quartz to quartz transplant or are you trying to put a quartz movement into a case that housed a mechanical movement?
I compared the 2 movements and the size is very similar, so I guess your main problem will be if the stem and pushers align with the case. Very interested in the results. If successful I could be very temted