question

From what I understand, for a merchant to change his/her subscription plan, he/she has to 1. Uninstall the application 2. Re-install the app with the new subscription plan

Not necessarily. If the app has multiple subscription plans, then you will see a button above uninstall button. It will say something like "$9.99 - Subscribe" or "FREE - Subscribe" based on the selected subscription plan. So the end user just needs to select his subscription plan and subscribe for it.

Uninstalling the app and Installing it again with a different plan will also work. But it is easier the other way around.

So will I get 2 webhook calls - uninstall followed by install or will there be one single subscription change webhooks call?

If you uninstall and install the app, then you will get 2 web hooks. One for app uninstall (as a DELETE hook) and one for app install (as CREATE hook). If the app subscription is changed, then you will get just 1 web hook. It will be an UPDATE hook.